Public Protector’s call to change the Constitution is unlawful: SARB
The South African Reserve Bank says it will bring urgent review proceedings to have the Public Protector’s order to change the bank’s mandate in the Constitution be set aside.
In a statement on Tuesday, the bank said that it has consulted with its legal team and has been advised that the action prescribed by the Public Protector falls outside her powers and is unlawful.
Public Protector Busisiwe Mkhwebane on Monday released her latest report on the apartheid-era looting of the state by Bankorp – the financial institution that would later be incorporated into Absa.
In her findings, Mkhwebane found that the Reserve Bank and the government failed to recover R1.125 billion from Bankorp for irregular monetary gifts granted to it during apartheid.
As part of her ruling, in an apparent bid to “prevent the same thing from happening again”, Mkhwebane recommended that Parliament move to change the Reserve Bank’s mandate as written in the Constitution.
She wants the bank’s primary goal changed from “protect the value of the currency”, to “ensure the socio-economic well-being of citizens is protected”.
Reserve bank governor Lesetja Kganyago came out strongly against such changes, defending the current primary objective saying that by keeping inflation low and protecting South Africa’s currency, it is already supporting inclusive growth and the well-being of citizens.
“If we can keep inflation lower, anchoring inflation expectations, that should in turn generate a lower rate of interest to support the economy,” he said.
He said protecting the country’s economy isn’t as simple as changing a repo rate.
Speaking to talk Radio 702 on Tuesday, Mkhwebane stood her ground, saying that the Reserve Bank should be benefiting all citizens, and her recommendation was the starting point for all political parties to deliberate on how a situation like the Absa/Bankorp issue can be avoided in the future.
Currently, the bank is only focused on a few commercial interests, she said.
Legal experts have remarked that it is not within the Public Protector’s purview to make a recommendation that the Constitution be changed, saying that it is up to the National Assembly to determine if such an action is needed, and to initiate it.
Other analysts have pointed out the widely-held view that Mkhwebane is a loyalist to president Jacob Zuma, and her recommendation serves as a back-door entry for the “radical economic transformation” narrative to infiltrate the Reserve Bank.
Mkhwebane, responding to allegations of being captured by president Zuma on Monday, said: “I’m captured by the Constitution, not by anyone, I’m here to serve South Africans.”
Read: Public Protector wants to change the Constitution to “transform” the Reserve Bank
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