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<p>Public Enterprises minister Pravin Gordhan is colliding with the Public Protector as his legal team demands for more evidence to be provided for claims of collusion and improper conduct against minister Gordhan.</p>


Gordhan’s legal team demands more evidence from Mkhwebane

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<p>She was appointed into position this month back in 2016 to much consternation but she stood her ground and has been making waves doing her most talked about work. Advocate Busisiwe Mkhwebane came in the Public Protector office as a bit of an underdog and now she has political parties threatening court action as she fiercely does her work of holding public servant representative to account. Advocate Mkhwabane joins CNBC Africa while she has pile of work at her office from burning issue of VBS to many others.</p>


Public Protector Busisiwe Mkhwebane looks back at 2 years in office

<p class="MegaArticleBody_first-p_2htdt">A South African minister inadvertently misled parliament when she said a local consultancy firm linked to business friends of former President Jacob Zuma had no contracts with state power utility Eskom, a anti-graft watchdog said on Thursday.</p>
<p><img loading="lazy" decoding="async" class="aligncenter wp-image-299862 size-full" src="http://cnbc.africa/wp-content/uploads/2018/02/Minister-Lynne-Brown_GettyImages.png" alt="" width="850" height="564" /></p>
<p class="">New President Cyril Ramaphosa should take action within 14 days against the Public Enterprises Minister Lynne Brown, whose department oversees enterprises including Eskom, said Busisiwe Mkhwebane, head of the Public Protectors office.</p>
<p class="">“Minister Brown inadvertently misled Parliament in her assertion that there were no other contracts of engagement concluded between Eskom and Trillian,” said Mkhwebane in her report, adding that she breached a ministerial code of ethics.</p>
<p class="">Brown’s spokesman said he would issue a statement later.</p>
<p class="">This is the latest blow to a senior government official and comes as Ramaphosa is considering a cabinet reshuffle after replacing Zuma, whose rule was marred by a series of scandals.</p>
<p class="">Zuma’s business associates include three brothers from the Gupta family who have been accused of using their political connections to win state contracts and influence cabinet appointments. Zuma and the Gupta brothers deny wrongdoing.</p>
<p class="">Ramaphosa replaced Zuma as head of the ruling African National Congress in December having pledged to fight official corruption. Last week the party elected him head of state as Zuma resigned under political pressure.</p>
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<p class="Attribution_content_27_rw">Reporting by Tanisha Heiberg; Editing by James Macharia and Matthew Mpoke Bigg</p>
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South Africa’s anti-graft watchdog says minister misled parliament

<p>A South African court on Friday threw out the findings of a public anti-graft watchdog that Barclays Africa unduly benefited from an apartheid-era bailout of another bank and should repay.</p>
<p><img loading="lazy" decoding="async" class="aligncenter wp-image-126485 size-full" src="http://cnbc.africa/wp-content/uploads/2017/05/Barclays_Flickr.jpg" alt="" width="1024" height="768" /></p>
<p class="">The Public Protector had said in a report last year it had found South Africa’s apartheid government and central bank breached the constitution by giving Bankorp, a bank later acquired by Absa, the retail banking unit of Barclays Africa, a series of bailouts between 1986 to 1995.</p>
<p class="">The agency, a constitutionally mandated anti-corruption agency led by Busisiwe Mkhwebane, had ordered in its report that Barclays Africa must repay 1.1 billion rand ($83 million) to the state as it had unduly benefited from the Bankorp bailouts.</p>
<p class="">But the High Court ruled in favour of Barclays Africa’s arguments that it did not unduly benefit from the bailouts because the price it paid for Bankorp took into account the central bank’s financial assistance.</p>
<p class="">Barclays Africa had contended that the real beneficiaries of the bailouts were Bankorp shareholders, the majority of whom were policy holders of life insurer Sanlam.</p>
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<p class="Attribution_content_27_rw">Reporting by Tiisetso Motsoeneng; Editing by James Macharia and David Holmes</p>
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Barclays Africa wins case over $83 million payout in South Africa

<p data-reactid="32">Rating agency Moody’s warned on Wednesday that the erosion of South Africa’s institutional framework and recent calls for changes to the central bank’s currency and price stability mandate risked undermining the country’s credit ratings.</p>
<p data-reactid="33">Public Protector Busisiwe Mkhwebane, whose job is to ensure proper conduct in public office, sparked a political row and a plunge in the rand when she proposed changes to the South African Reserve Bank (SARB)’s mandate in June.</p>
<p data-reactid="34">The central bank had that recommendation quashed by the High Court. But in fresh court papers on Tuesday it accused Mkhwebane of a “glaring omission” in failing to disclose that she had consulted on the proposal with advisers to President Jacob Zuma.</p>
<p data-reactid="35">“Historically, institutional strength was a distinguished feature in the last couple of years but recently that has somehow deteriorated,” said Zuzana Brixiova, a senior analyst for Moody’s at a conference in Johannesburg.</p>
<p data-reactid="37">“The issue of the mandate is quite clear in the constitution and the central bank has been performing that mandate very well,” Brixiova said.</p>
<p data-reactid="38">Brixiova also said the timing of calls to change the central bank’s mandate and to nationalize the bank were “unusual” as they came ahead of the ruling African National Congress’s (ANC) conference in December to elect new leaders.</p>
<p data-reactid="39">“Some of the ANC members and some of the political parties are going beyond the SARB nationalization, they are talking about the nationalization of the entire financial sector, so one also has to ask to what extent is this maybe the first step toward that,” she said.</p>
<p data-reactid="40">Policy and political uncertainty has seen business confidence slip to its lowest level in 30 years.</p>
<p data-reactid="41">In June, Moody’s cut South Africa’s debt to Baa3, its lowest investment-grade rating, citing a cabinet reshuffle in March that saw widely respected Pravin Gordhan fired as finance minister.</p>
<p data-reactid="42">S&amp;P Global Ratings and Fitch each downgraded South Africa’s credit ratings to “junk” in the aftermath of Gordhan’s removal.</p>
<p data-reactid="44">Allegations of widespread corruption in the awarding of government contracts worth billions of dollars have also dented investor confidence and widened divisions within the ANC.</p>
<p data-reactid="45">The allegations are based on leaked emails between the wealthy Gupta family &#8212; who have close ties with Zuma &#8212; and their associates. Reuters has not been able to independently verify the allegations in the emails.</p>
<p>Zuma and the Gupta family have denied any wrongdoing.</p>
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<p class="Attribution_content_27_rw" data-reactid="47">Reporting by Olivia Kumwenda-Mtambo; Writing by Mfuneko Toyana; Editing by James Macharia and Catherine Evans</p>
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Pressure on South Africa’s central bank a key credit risk: Moody’s

<p data-reactid="39">South Africa’s anti-graft watchdog consulted the Presidency on a proposal to change the central bank’s mandate to promote economic growth rather than currency and price stability, the bank said in court papers submitted this week.</p>
<p data-reactid="40">Public Protector Busisiwe Mkhwebane, whose job is to ensure proper conduct in public office, sparked a political row and a plunge in the value of the rand when she proposed changes to the central bank’s monetary policy mandate in June.</p>
<p data-reactid="41">The court quashed her recommendations in August.</p>
<p data-reactid="42">Mkhwebane made the proposal as she announced her findings that the apartheid government that ended in 1994 had breached the constitution by supplying Bankorp, which was bought by Absa in 1992, with a series of bailouts from 1985 to 1995.</p>
<p data-reactid="43">Absa is now owned by Barclays Africa Group and Mkhwebane said Barclays Africa had to pay 1.1 billion rand ($85 million).</p>
<p data-reactid="44">The issue of the bailout is still under review in court after Absa and the central bank challenged the findings.</p>
<p data-reactid="45">It is unclear why Mkhwebane included the recommendations on monetary policy at the end of an investigation into Bankorp.</p>
<p data-reactid="46">However, in a court affidavit filed on Monday the central bank said Mkhwebane met with the Presidency and the State Security Agency before releasing her findings, local news service EWN said.</p>
<p data-reactid="47">It also posted excerpts of the bank’s filings online.</p>
<p data-reactid="48">Mkhwebane did not disclose her meeting with the Presidency on June 7 “to discuss the new remedial action in her final report”, the affidavit said, describing the her failure to do so as a “glaring omission”.</p>
<p data-reactid="50">A Presidency spokesman was unavailable and the central bank declined immediate comment.</p>
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<p class="Attribution_content_27_rw" data-reactid="52">Reporting by Olivia Kumwenda-Mtambo; Editing by Ed Cropley</p>
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S.A Public Protector discussed cenbank mandate with Presidency: court papers

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<p>The DA recently requested the Public Protector, Advocate Busisiwe Mkhwebane, to investigate possible corruption in the process undertaken by the Universal Service and Access Agency of South Africa to procure 1.5 million Set-Top Boxes.</p>


DA calls for probe into set-top box tender

<p data-reactid="40">A South African court rejected on Tuesday a call by the anti-graft watchdog for the central bank to focus its monetary policy on boosting economic growth instead of on fighting inflation and keeping the rand currency stable.</p>
<p data-reactid="41">Public Protector Busisiwe Mkhwebane, whose job is to ensure proper conduct in public office, sparked a political row and a big sell-off of the rand when she proposed the change in the central bank&#8217;s monetary policy target in June.</p>
<p data-reactid="42">High Court judge John Murphy said Mkhwebane&#8217;s proposal lacked merit, in a ruling welcomed by the central bank and which was supportive for the rand.</p>
<p data-reactid="43">&#8220;She would do well to reflect more deeply on her conduct in this investigation and the criticism of her by the Governor of the Reserve Bank and the Speaker of Parliament,&#8221; he said.</p>
<p data-reactid="44">In June, central bank governor Lesetja Kganyago filed a court challenge to quash the recommendation, arguing that Mkhwebane went beyond the scope of her own mandate and describing the proposal as reckless.</p>
<p data-reactid="45">Policymakers also warned that the political concerns and regulatory uncertainty caused by the proposal were harming investor sentiment towards South Africa, the continent&#8217;s most industrialised economy.</p>
<p data-reactid="46">Responding to the court verdict on Tuesday, Kganyago said: &#8220;We welcome the judgment and we will let the judgment speak for itself.&#8221;</p>
<p data-reactid="47">&#8220;The mandate of the Reserve Bank is spelt out in the constitution and that is what we had always argued for.&#8221; he told reporters at a meeting of central bankers in Pretoria.</p>
<p data-reactid="48">Mkhwebane said last month she would not defend her recommendation in court and she was not represented at a hearing for the case.</p>
<p data-reactid="49">Spokeswomen Cleopatra Mosana said the Public Protector was studying the judgment and was not immediately able to comment.</p>
<p data-reactid="51">The rand firmed by 0.26 percent after the ruling to 13.2850 per dollar, up from 13.3500.</p>
<p>South Africa&#8217;s unemployment is at a 14-year high and key sectors of the economy, such as trade and manufacturing, are struggling as the country reels in recession.</p>
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<p class="Attribution_content_27_rw" data-reactid="53">Reporting by Mfuneko Toyana and Olivia Kumwenda-Mtambo in Pretoria and TJ Strydom and Tanisha Heiberg in Johannesburg; Writing by James Macharia; Editing by Gareth Jones</p>
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Court rejects proposal to change South Africa’s central bank mandate

<p>Absa today issued its application to the High Court for the review and setting aside of the findings and remedial action of the Public Protector’s report on the financial assistance provided by the South African Reserve Bank to Bankorp, which was later bought by  Absa.</p>
<p>We look forward to this case being brought to court. The years of baseless accusations have been unfair and prejudicial to Absa. Because the business of the courts is conducted in the open, South Africans will get an opportunity to hear the facts and watch them being interrogated, in order for this matter to be put to rest.</p>
<p>Absa is challenging the Public Protector’s report on several grounds, namely:</p>
<ol>
<li>The Report’s findings and remedial action are based on material errors of fact, including that Absa benefited from SARB financial support and that the SARB assistance did not benefit the general public.  There is no debt owed by Absa.</li>
<li>The Public Protector’s process was procedurally flawed and unfair to Absa.</li>
<li>The debt that is alleged to be due had prescribed and is therefore not recoverable.</li>
<li>The Public Protector has no jurisdiction to investigate the matter.</li>
</ol>
<p><strong><u>Absa paid fair value for Bankorp</u></strong></p>
<p>In reaching her finding that Absa benefitted from the SARB financial support, the Public Protector appears to have impermissibly ignored facts and disregarded evidence provided to her.</p>
<p>The price paid to purchase Bankorp took into account the assistance from the SARB. The eventual price paid for Bankorp by Absa was R1.23 billion and the net asset value of Bankorp was R1.222 billion (calculated including the total net yield payable under the financial assistance programme to Bankorp).  Absa was therefore not enriched.</p>
<p>The Public Protector’s conclusion, that the SARB assistance to Bankorp was not in the public interest, is not proven. On the contrary both the Davis Panel and Heath investigation, the two statutory investigations on the matter, found that the assistance was warranted to protect the financial system of South Africa. The unlawfulness, the investigations found, was in the manner in which the SARB extended the support.</p>
<p>The facts found by the Davis Panel were corroborated in the evidence Absa and SARB placed before the Public Protector.  There was no evidence to contradict those facts. The Public Protector was selective in which aspects of the various reports put before her she would use. As a result, the report fails to explain why the Davis Panel (as well as Absa, the SARB and the Treasury) was wrong in its analysis of the agreement of sale between Absa and Bankorp.</p>
<p>In stark contrast, the Ciex investigation offered no reasoning whatsoever for its conclusion that Absa was liable for R3.2 billion.  It was merely advice from Ciex that the government should coerce Absa into paying.</p>
<p>The finding that the assistance by the SARB did not benefit the South African public is equally irrational. The Public Protector did not contest, but rather accepted that Bankorp used the “lifeboat” to set-off the bad debts of its customers and that this served to avert a systemic crisis of the banking sector.  It is therefore illogical to then conclude that the South African public received no benefit at all.</p>
<p><strong><u>Procedural unfairness</u></strong></p>
<p>The Public Protector violated Absa’s right to procedural fairness in the manner in which she imposed the remedial action. Firstly, she refused to provide Absa with documents upon which she relied to make her findings both in the Provisional and Final Report, thus denying Absa the opportunity to properly appreciate and respond to the case it had to meet. This violates Absa’s basic right to procedural fairness.</p>
<p>Secondly, she relied heavily on the Ciex document which in turn made adverse findings against Absa. During its “investigation”, Ciex never afforded Absa an opportunity to make representations and to provide any relevant evidence, completely disregarding ABSA’s basic right to a fair hearing.</p>
<p><strong><u>Debt Prescribed</u></strong></p>
<p>Absa maintains that it has met all obligations relating to the SARB assistance in October 1995.</p>
<p>However, it is worth noting that any claim, valid or not, would be subject to the law of prescription.  The alleged debt would have prescribed 3 years after it was due.  More than 21 years have passed since it was allegedly due.</p>
<p>The Public Protector’s views on prescription appear to rest on a flawed understanding of the role played by the law of prescription.  There is no dispute that the debt has prescribed.</p>
<p>The Public Protector clearly believes that the law should be different, but this view on the law of prescription cannot alter that law.</p>
<p><strong><u>Jurisdiction</u></strong></p>
<p>In the final report, the Public Protector correctly states that:</p>
<p>“<em>It should be noted that the Public Protector has no jurisdiction to investigate matters that took place before the coming into effect of the Public Protector Act or the establishment of Public Protector Office in 1995. It would be in contravention of the Public Protector Act for this office to investigate matters that took place before the coming into effect of the Public Protector Act or the establishment of this office in October 1995.</em>”</p>
<p>The Public Protector therefore, misapplied the principle of jurisdiction by embarking upon an investigation and imposing remedial action which fundamentally related to events which occurred before the establishment of her office and the coming into effect of the Public Protector Act. The Ciex document concerns transactions which occurred before the coming into effect of the Public Protector Act and the establishment of the office of the Public Protector. By relying on the Ciex report, the Public Protector is in truth, imposing recovery mechanisms in respect of debts allegedly incurred before the establishment of the Office and the coming into operation of the Public Protector Act.</p>
<p><strong><u>Remedial Action is substantively unlawful</u></strong></p>
<p>The remedial action prescribed by the Public Protector, which is designed to ensure recovery of R1.125 billion allegedly owed by Absa to SARB is substantially unlawful. Firstly, no such amount is owing at all. Secondly, to require the Special Investigating Unit (SIU) to approach the President to re-open an investigation which has already been concluded would be unlawful because the very matter has already been investigated and the issue closed. By   prescribing the remedial action in a manner that compels the SIU and the President to act as directed, the Public Protector has exceeded her own powers and usurped the powers of the SIU and the President.</p>
<p>Furthermore, since the debt has prescribed, the remedial action requires the SIU and the President to embark upon a process which is entirely irrational in the circumstances.</p>
<p><strong><u>Conclusion</u></strong></p>
<p>As part of our application, we are also requesting the &#8220;Rule 53&#8221; record &#8211; which is the record of all documents that served before the Public Protector in doing her report.  Once we have the record, we will supplement our application as may be necessary.   Given the level of public interest and discussion of this matter, we believe the public has a right to have access to this information so this matter can be dealt with and concluded in a transparent manner.</p>


Absa launches High Court application to review and set aside Public Protector’s Report

<p>South Africa’s Public Protector Busisiwe Mkhwebane has called for an urgent investigation to take place into state capture, and backed her predecessor&#8217;s call that President Jacob Zuma has no right to decide which judge should oversee the inquiry.</p>
<p>According to <a href="https://www.enca.com/south-africa/public-protector-calls-for-urgent-state-capture-inquiry">ENCA</a>, this was revealed in her answering affidavit in the state of capture review application.</p>
<p>Zuma in December last year <a href="http://cnbc.africa/news/southern-africa/2016/11/25/south-africas-zuma-to-challenge-influence-peddling-report-implicating-him/">called on the courts</a> to review and set aside former public protector Thuli Madonsela&#8217;s State of Capture report.</p>
<p><a href="http://cnbc.africa/wp-content/uploads/2017/07/State-of-Capture-14-October-2016.pdf">State-of-Capture-14-October-2016</a></p>
<p><a href="http://cnbc.africa/wp-content/uploads/2017/07/Annexure-A1-Interview-between-President-Zuma-and-the-Public-Protector.pdf">Annexure-A1-Interview-between-President-Zuma-and-the-Public-Protector</a></p>
<p>Last month Mkhwebane <a href="http://cnbc.africa/news/political/2017/06/15/s-africas-public-protector-launches-probe-influence-peddling-state-owned-firms/">launched a new investigation</a> into allegations of influence-peddling and unlawful enrichment by certain officials within three state-owned firms after thousands of emails relating to alleged fraud were leaked.</p>

SA’s Public Protector wants an urgent inquiry into state capture

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<p>Public Protector Busisiwe Mkhwebane will not oppose a court challenge against her binding proposal calling for a change to the mandate of the South African Reserve Bank.</p>


Mkhwebane won’t oppose SARB’s review application

<p>South African Finance Minister Malusi Gigaba on Friday accused the country&#8217;s anti-corruption agency of overstepping the mark in suggesting changes to the way the central bank works, insisting that monetary policy should remain independent.</p>
<p>A call by South Africa&#8217;s public protector for an overhaul of Reserve Bank&#8217;s mandate &#8212; to focus on growth rather than inflation and the currency &#8212; has rattled investors this month, hitting the rand.</p>
<p>It exposed worsening divisions between state institutions just as President Jacob Zuma is embroiled in a net of scandals.</p>
<p>&#8220;The public protector does not have the power to direct parliament to amend the constitution,&#8221; Gigaba told business leaders at the start of a policy conference of the ruling African National Congress.</p>
<p>&#8220;These recommendations should have been directed at the finance ministry. We should all insist on the independence of the South African Reserve Bank.&#8221;</p>
<p>Zuma has drawn unprecedented criticism from senior ruling party members in recent weeks. A shock cabinet reshuffle prompted in March ratings agencies to downgrade South Africa to &#8220;junk&#8221; status and unemployment is at a 14-year high.</p>
<p>The economy has also entered recession, prompting Gigaba to call in his speech for &#8220;drastic measures&#8221; to kick-start growth.</p>
<p>&#8220;Should the main indicators continue to disappoint any further we may have to seek assistance from quarters we have thus far avoided,&#8221; Gigaba added, without elaborating.</p>
<p>Asked by Reuters if he was referring to the International Monetary Fund, Gigaba smiled and said &#8220;Any&#8221;.</p>
<p>The rand extended its losses against the dollar on Friday, trading 0.7 percent lower, while bonds weakened after Gigaba&#8217;s comments on the possibility of seeking outside assistance.</p>
<p>Isaac Mashego, senior economist at Nedbank, said with the rate of economic growth not keeping in touch with the government&#8217;s expenditure and the budget deficit widening, the government is going to have borrow more.</p>
<p>&#8220;This might mean going to multilateral institutions like the IMF. This is the worse case scenario,&#8221; he said.</p>
<p><strong>INDEPENDENCE ROW</strong></p>
<p>The row over the central banks began earlier this month, when Public Protector Busisiwe Mkhwebane said its current mandate &#8212; centred on maintaining currency and price stability &#8212; was focused on a &#8220;few commercial interests&#8221; rather than boosting the economy.</p>
<p>The Reserve Bank immediately rejected the call, saying Mkhwebane&#8217;s office had no business in making recommendations about how it is run. It filed a court challenge this week asking for the recommendation to be set aside.</p>
<p>South Africa&#8217;s parliament and the ANC also rejected the recommendation, but the country&#8217;s largest union backed it.</p>
<p>Credit rating firm S&amp;P Global has warned that its rating for South Africa could be cut deeper into junk territory if the government meddles with the &#8220;critical&#8221; independence of the country&#8217;s central bank.</p>
<p>Critics of President Zuma see the public protector&#8217;s comments as an attempt to undermine the bank’s authority as part of a broader attack on state institutions, including the finance ministry, the tax authorities and the public protector’s office.</p>
<p>The president, who was due to deliver a key speech at the conference, rejects such criticism.</p>
<p>Zuma will be replaced as ANC leader at a national conference in December. Deputy President Cyril Ramaphosa and former African Union chair Nkosazana Dlamini-Zuma, the incumbent&#8217;s ex-wife, widely viewed as frontrunners.</p>
<p>The six-day conference beginning on Friday should offer clues to who may be in the ascendant.</p>
<p>Gareth Newham, a governance specialist at Pretoria-based think tank Institute for Security Studies said although the conference will focus on policy, the leadership battle to succeed Zuma would be at the heart of the discussions.</p>
<p>&#8220;The way policy is spoken about and framed is going to be a proxy for leadership battle,&#8221; he said.</p>
<p>&#8220;It&#8217;s difficult to say who is going in to the conference with more momentum, the forces are quite balanced,&#8221; he said referring to Ramaphosa and Dlamini-Zuma.</p>
<p>(Additional reporting Mfuneko Toyana, Ed Stoddard and Nqobile Dludla; Writing by James Macharia Editing by Jeremy Gaunt)</p>


Central bank must be independent, South African finance minister says

<p>What kind of financial system is sure to collapse if the central bank cares about people’s well-being?</p>
<p>The <a href="http://www.pprotect.org/library/investigation_report/2016-17/Report%208%20of%202017&amp;2018%20Public%20Protector%20South%20Africa.pdf">recommendation</a> by South Africa’s Public Protector that the Reserve Bank’s mandate change, says much about Busisiwe Mkhwebane, none of it flattering. It says just as much about mainstream economic debate &#8211; and none of that is flattering either.</p>
<p>Mkhwebane recommended that the central bank’s constitutional mandate, which makes protecting the currency its primary goal, be changed to one which requires it to “promote balanced and sustainable economic growth while ensuring that the socio-economic well-being of the citizens are protected”. She also said the constitution should require the bank “to achieve meaningful socio-economic transformation”.</p>
<p>This triggered a wave of protests, as well as an announcement from the <a href="https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/7852/PRESS%20RELEASE%20FOR%20SARB%20.pdf">South African Reserve Bank</a> that it would take the matter to court. The <a href="https://probonomatters.co.za/south-african-reserve-bank-says-public-protector-is-overreaching/">Reserve Bank</a> had no option. The constitutional court has ruled that the Public Protector’s findings are binding unless they are challenged in court. Her recommendation wildly exceeded what she is allowed to do by the constitution – or democratic good sense &#8211; and the Reserve Bank could not allow it to stand.</p>
<p>Democratic constitutions are changed by large majorities of the people or their elected representatives – not by individuals. By making a binding recommendation that the constitution be changed, Mkhwebane signalled that she either doesn’t understand – or does not care – for democracy.</p>
<p>Her report is also very useful to a faction of the governing party which wants to <a href="https://theconversation.com/pursuing-a-30-year-old-bailout-is-sending-south-africa-on-a-wild-goose-chase-79792">deflect charges of state capture</a> by claiming that white monopoly capital already controls the state. There are real questions about the fitness for office of a Public Protector whose report seems more interested in protecting connected politicians and business people than with taking the people’s will seriously.</p>
<p>But the reaction did not stop at insisting that Mkhwebane has no business telling the people what the constitution should say. Much of it objected not only to her saying what the Reserve Bank’s mandate should be, but to anyone at all doing that.</p>
<h2>An important debate</h2>
<p>The prize for the wildest reaction went to the commentator who declared that Mkhwebane’s ideas on the Bank’s mandate were <a href="https://mg.co.za/article/2017-06-21-the-holocaust-denier-the-public-protector-and-the-reserve-bank">inspired</a> by someone who denied that the Nazi genocide happened. Others stopped short of tarring constitutional change with the same brush as mass murder but were united in claiming that to suggest that the Reserve Bank’s mandate be broadened is “<a href="https://www.timeslive.co.za/ideas/2017-06-21-public-protectors-bizarre-instruction-harms-our-wellbeing/">economically illiterate</a>” and deeply damaging.</p>
<p>Absa, who was the subject of a separate finding by the public protector on the issue of a <a href="https://probonomatters.co.za/the-public-protector-in-her-own-words-on-the-bankorpabsa-matter/">controversial bailout</a>, asked a court to rule that her proposed change posed a “<a href="https://www.timeslive.co.za/sunday-times/business/2017-06-21-in-full-absa-goes-to-court-over-public-protector-report/">serious risk to the financial system</a>”. For its part the rating agency Standard &amp; Poor’s, happy as ever to police the boundaries of economic correctness, warned that any interference with the Reserve Bank’s independence could trigger new downgrades.</p>
<p>To insist that anyone who proposes changing the Reserve Bank’s mandate is economically damaging and stupid is as contemptuous of democracy and dangerous to the economy as Mkhwebane’s excess. It is undemocratic because it seeks to close down policy debate by declaring that only one view of the Reserve Bank’s mandate can ensure a healthy economy. It is dangerous because it blocks the search for economic remedies by seeking to bully even those who propose only mild changes to what the country now has.</p>
<p>The idea that the Reserve Bank should have a broader mandate is neither radical nor dangerous. The most famous central bank, the <a href="https://www.federalreserve.gov/aboutthefed/structure-federal-reserve-system.htm">US Federal Reserve</a>, has a broader mandate. Its dual mandate requires it to seek maximum employment as well as price stability.</p>
<p>The <a href="http://www.rba.gov.au/monetary-policy/">Australian</a> equivalent’s mandate includes “maintenance of full employment and economic prosperity and welfare of the people”. <a href="https://www.ecb.europa.eu/ecb/html/index.en.html">The European Central Bank</a>, famed for its love of austerity, has a mandate to seek “sustainable growth”.</p>
<p>And the <a href="http://www.bankofengland.co.uk/Pages/home.aspx">the Bank of England’s</a> website says that, subject to its goal of price stability, it aims to support the government’s economic objectives.</p>
<p>In South Africa, not only has the view that the central bank’s mandate is too restrictive been repeated periodically but it may well have been implemented for a while. In 2010, then finance minister Pravin Gordhan <a href="https://www.moneyweb.co.za/archive/pravins-letter-to-gill-marcus/">wrote</a> to then Reserve Bank governor, Gill Marcus, proposing a mandate which included growth and employment. Marcus <a href="http://m.fin24.com/fin24/Economy/Inflation-debate-not-over-20100219">reacted positively</a>, which suggests that the bank acted on Gordhan’s letter. The financial system survived.</p>
<p>The US, European and Australian financial systems have also not collapsed. Their mandates have not triggered a downgrade and no one has accused these societies of economic illiteracy.</p>
<p>So either double standards are being applied or we are being told that restrictive central bank mandates are essential only if countries are in particular parts of the world (such as Africa) and governed by particular types of people (Africans).</p>
<p>And why does a change in the Bank’s mandate undermine its independence? A central bank loses its independence if politicians (or anyone else) can tell it what to do, not if its mandate changes.</p>
<p>For all its flaws, the Public Protector’s proposal would retain the Reserve Bank’s independence, leaving it to the bank to decide what promotes the “well-being” of the people or “transformation”.</p>
<h2>Closing down debate is common</h2>
<p>None of this means that the Reserve Bank’s mandate must change. Or that central bank independence must go. But it does mean that no one should be discouraged from debating the issue, as people routinely do in other democracies and market economies. What, besides that prejudice which we prettify by the term <a href="http://www.encyclopedia.com/history/dictionaries-thesauruses-pictures-and-press-releases/afropessimism">Afropessimism</a>, explains the insistence that we may not debate what is freely discussed in most other places?</p>
<p>Closing down debate in this way is common in South Africa. It also lies behind complaints of policy uncertainty which does not mean, as it does elsewhere, that government keeps changing its mind and sending mixed messages – the macro-economic framework has been stable for more than two decades. It means, rather, that some people – who some others may take seriously – raise policy ideas the economic mainstream does not like.</p>
<p>This demand that people can say anything they like about economic policy as long as the mainstream likes it too offers a misleading view of the economy. It says that there is nothing wrong with it except political interference and that it will flourish if politicians simply leave alone what is done now.</p>
<p>The <a href="https://theconversation.com/business-needs-to-change-and-stop-blaming-others-for-south-africas-ills-64942">contrary evidence</a> is offered by mainstream organisations such as the International Monetary Fund and the South African Reserve Bank itself which have shown that the current economic rut is a product of problems in the private economy as well as what government does.</p>
<p>This means that the economy must change. This, in turn, requires new ideas. They will not emerge unless everything is up for debate and ideas are not silenced because they trigger the fears and prejudices of a few.</p>


Op-Ed: South Africa’s central bank row points to dangerous levels of intolerance

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<p>Finance Minister Malusi Gigaba says he is still weighing whether to back Reserve Bank&#8217;s bid for a court review that its mandate be changed.</p>


Mkhwebane’s recommendations are unlawful – SARB

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<p>Absa will seek a high court review of the Public Protector&#8217;s CIEX report, which instructs that it pay back more than R1bn. Songezo Zibi, Head of Communications at Barclays Africa Group joins CNBC Africa for more.</p>


ABSA seeks high court review of CIEX report

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<p>Public Protector, Advocate Busisiwe Mkhwebane upset the rand yesterday when she recommended Parliament change the constitutional mandate of the Reserve Bank from protecting the value of the rand to promote balanced and sustainable economic growth.</p>


Mkhwebane’s proposed changes to the constitution raise alarm

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<p>Public Protector, Busisiwe Mkhwebane recommendation that the Reserve Bank&#8217;s constitutional mandate has received major backlash. But she has defended the decision, saying the bank should act in the interests of empowering ordinary citizens.</p>


Busisiwe Mkhwebane

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Busisiwe Mkhwebane

Gordhan’s legal team demands more evidence from Mkhwebane

Public Protector Busisiwe Mkhwebane looks back at 2 years in office

South Africa’s anti-graft watchdog says minister misled parliament

Barclays Africa wins case over $83 million payout in South Africa

Pressure on South Africa’s central bank a key credit risk: Moody’s

S.A Public Protector discussed cenbank mandate with Presidency: court papers

DA calls for probe into set-top box tender

Court rejects proposal to change South Africa’s central bank mandate

Absa launches High Court application to review and set aside Public Protector’s Report

SA’s Public Protector wants an urgent inquiry into state capture

Mkhwebane won’t oppose SARB’s review application

Central bank must be independent, South African finance minister says

Op-Ed: South Africa’s central bank row points to dangerous levels of intolerance

Mkhwebane’s recommendations are unlawful – SARB

ABSA seeks high court review of CIEX report

Mkhwebane’s proposed changes to the constitution raise alarm

S.A Public Protector seeks citizens’ socio-economic well-being

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