South African parliament opposes calls to change central bank mandate

PUBLISHED: Fri, 23 Jun 2017 09:28:25 GMT


The South African parliament will launch a court challenge against an anti-graft watchdog’s recommendation of constitutional changes to alter the mandate of the central bank, it said.

The legislative assembly joined the central bank and lender Barclays Africa in seeking a court review of Public Protector Busi Mkhwebane’s proposal to change the central bank’s primary mandate of maintaining currency and price stability to focus on economic growth.

“Parliament believes that the remedial action (mandate change), which is binding in terms of the law, usurps the powers of the institution under the Constitution,” it said in a statement posted on its website.

“Parliament will accordingly initiate a court application to have this remedial action set aside on the basis of its unconstitutionality.”

Mkhwebane made her proposal to a Pretoria news conference on Monday where she delivered her findings on an apartheid-era bailout of Barclays Africa Group. The lender has denied any wrongdoing.

Her call threatens to further stain South Africa’s image as an investor-friendly emerging market, coming less than a week after mines minister Mosebenzi spooked investors by raising the minimum threshold for black ownership of mining companies to 30 percent from 26 percent.

The independence row over the South African Reserve Bank has also highlighted divisions within the tripartite alliance of the ruling African National Congress, the country’s biggest union, Cosatu, and the South African Communist Party.

Both the ANC and the communist party are opposed to constitutional changes aimed at altering the role of the central bank while Cosatu backed calls for amendments.

(Reporting by Tiisetso Motsoeneng)

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.