The Public Protector released her report on the Bankorp “bail-out” on 21 June 2017. Many among us will have something to say about the remedial action she proposes on this specific issue, in essence that Absa repays the “government” an amount of R1.125 billion.
However, we confine ourselves here to her rather startling recommendation that the mandate of the SARB [South African Reserve Bank] should be changed &#8211; a matter that she was not asked to consider. One of her remedial actions is an instruction to the Chairperson of the Portfolio Committee on Justice and Correctional Services to “initiate a process that will result in the amendment of Section 224 of the Constitution”. She then even more remarkably goes onto suggest what the new mandate should be:
224 (1) The primary object of the South African Reserve Bank is to promote balanced and sustainable economic growth in the Republic, while ensuring that the socio-economic well-being of the citizens are (sic) protected.
While this is an unexpected (and unwarranted) recommendation, it does raise the very interesting question about what mandate is appropriate for the central bank of an emerging economy such as South Africa. Those of us with research expertise and direct experience of monetary policy and central banking matters will acknowledge the complexities of these debates at both a theoretical and practical and policy level. Some academics economists will be pleased with the exclusive price stability mandate of the SARB as per section 224 (1) of the 1996 constitution. Others will argue for a broader mandate including growth and employment, alongside price stability. Some combination of price stability, growth, employment are in the mandates of the US Fed, the Reserve Bank of Australia, and Canada, and even the EU.
		
				
		
The academic debate over central banks’ mandate is an international one and has been going on in one way or another for most of the 20thC. It became especially tense and complicated in the context of the growing dominance of new neo-classical economic thinking associated with Robert Lucas and his research collaborators since the early 1980s. Although there has been some convergence around a narrow price stability mandate in practice since then, there are also many examples of central banks which have a statutory or legal mandate that includes either growth or employment or some combination of these three elements. In NO case that we are aware of is a central bank’s mandate spared the responsibility of price stability (however phrased), whatever other objectives are included. To exclude price stability from a central bank’s objective in favour of some poorly conceived reference to ‘socio-economic well-being” is incomprehensible and plainly irresponsible.
We are not against, and many of us would positively welcome and support, the opening up of a well-informed, properly constituted and transparent debate about the mandate of the SARB at some appropriate time, and through the proper institutions, e.g. through a parliamentary enquiry at which expert testimony and international experience are solicited. Indeed, it is important not to conflate a defence of the proper process by which such debates should be constituted, with a defence of the current mandate of the SARB. It is quite possible to defend the independence of the SARB while questioning how appropriate its current mandate is to the challenges facing the country.
The crisis of low growth and high unemployment coupled with growing inequality suggests that this and other aspects of our economic policy stance should be debated in a responsible manner, designed to bring about a much needed improvement in the quality of life and work among our people, a majority of whom have not yet witnessed the dividends of democracy. There is no reason why the inclusion of growth and employment, together with price stability, cannot be an intrinsic part of such a public engagement. But uninformed and rash statements, especially ones that carry the power and binding nature of the PP, do not assist us at all. Threats to the operational independence and constitutional mandate of the SARB that come about in this manner represent a grave threat to an economy already crippled by a number of serious problems.
The likelihood that the PP’s analysis and remedial actions are designed, not as arguably well-intentioned even if plainly wrong interventions, but rather as part of the assault against the remaining institutions in the state sphere that stand for good governance is very, very high. That is why those who are opposed to such state looting, as we all are, must stand in defence of the SARB, even if we may differ on some aspects of the theoretical and policy debate about the role and mandate of central banks such as SARB in today’s world.
That was also our collective and publicly articulated view on two previous occasions over the past 18 months when two respected Ministers of Finance were unceremoniously dumped by the President.
*Signatories (alphabetical)
Matt Andrews 
Christo Auret 
Haroon Bhorat 
Derick Blaauw 
Anthony Black 
Ilsé Botha 
Danny Bradlow 
Adele Breytenbach 
Philippe Burger 
Rulof Burger 
Le Roux Burrows 
Marianne Camerer 
Daniela Casale 
Ivor Chipkin 
Nico Cloete 
Johan Coetzee 
Kenneth Creamer 
Stan Du Plessis 
David Everatt 
Olivia Ezeobi 
Frederick Fourie 
Pieter Fourie 
Steven Friedman 
Alison Gillwald 
Jannie Rossouw 
Amanda Gouws 
Duncan Hodge 
James Hodge 
Hylton Hollander 
Clare Hofmeyr 
Petronella Horn 
Gilad Isaacs 
Faizel Ismail 
Rachel Jafta 
David Kaplan 
Richard Ketley 
Murray Leibbrandt 
Anthony Leysens 
Elsabe Loots 
Neva Makgetla 
Stephen Malherbe 
Julian May 
Lumkile Mondi 
Jabulile Monnakgotla 
Mike Morris 
Eldridge Moses 
Bokang Mpeta 
Liezl Nieuwoudt 
Morné Oosthuizen 
Vishnu Padayachee 
Brigitte Pegado 
Marinda Pretorius 
Vimal Ranchhod 
Monique Reid 
Gareth Roberts 
Simon Roberts 
Ayesha Sayed 
Maxi Schoeman 
Collette Schulz-Herzenberg 
Krige Siebrits 
Simone Smit 
Mark Swilling 
Christopher Tapscott 
Nicola Theron 
Amy Thornton 
Imraan Valodia 
Theo van der Merwe 
Piet-Hein van Eeghen 
Lize Van Robbroeck 
Corne Van Walbeek 
Cobus Vermeulen 
Dieter von Fintel 
Marissa von Fintel 
Merle Werbeloff 
Martin Wittenberg 
Ingrid Woolard 
Uma Kollamparambil 
Andries du Toit

Open letter from South African academics and economists: Hands off the Reserve Bank

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.
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.
It exposed worsening divisions between state institutions just as President Jacob Zuma is embroiled in a net of scandals.
&#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.
&#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;
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.
The economy has also entered recession, prompting Gigaba to call in his speech for &#8220;drastic measures&#8221; to kick-start growth.
&#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.
Asked by Reuters if he was referring to the International Monetary Fund, Gigaba smiled and said &#8220;Any&#8221;.
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.
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.
&#8220;This might mean going to multilateral institutions like the IMF. This is the worse case scenario,&#8221; he said.
INDEPENDENCE ROW
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.
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.
South Africa&#8217;s parliament and the ANC also rejected the recommendation, but the country&#8217;s largest union backed it.
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.
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.
The president, who was due to deliver a key speech at the conference, rejects such criticism.
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.
The six-day conference beginning on Friday should offer clues to who may be in the ascendant.
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.
&#8220;The way policy is spoken about and framed is going to be a proxy for leadership battle,&#8221; he said.
&#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.
(Additional reporting Mfuneko Toyana, Ed Stoddard and Nqobile Dludla; Writing by James Macharia Editing by Jeremy Gaunt)

Central bank must be independent, South African finance minister says

On Tuesday the South African Reserve Bank filed an urgent application at the North Gauteng High Court to have an instruction by the Public Protector reversed. The central bank seeks to reverse the anti-graft regulator’s instruction to have the bank&#8217;s mandate of protecting the value of currency changed. On Wednesday the Reserve Bank Governor Lesetja Kganyago spoke to CNBC from Portugal about South Africa&#8217;s economy and the central bank&#8217;s mandate.

SARB Governor Kganyago on SA’s recession & its mandate

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The Public Protector says it acknowledges receipt of the judicial review application brought by the South African Reserve Bank. The central bank seeks to reverse the anti-graft regulator&#8217;s instruction to have the bank&#8217;s mandate.

Why SARB is heading to the court over the Public Protector’s instruction

JOHANNESBURG (Reuters) &#8211; The head of South Africa&#8217;s anti-graft watchdog is open to talks on her recommendation to change the central bank&#8217;s mandate, a proposal that has drawn sharp criticism from parliament, the ruling party and investors, a local news agency said on Saturday.
Public Protector Busi Mkhwebane&#8217;s recommendation to alter the South African Reserve Bank&#8217;s principal constitutional mandate of maintaining currency and price stability to focus on economic growth has highlighted worsening divisions between the country&#8217;s state institutions.
Both the central bank and parliament plan to mount legal challenges to the proposal.
Mkhwebane defended her recommendation but said she was willing to hold discussions with those opposing it, news agency Eyewitness News (EWN) reported.
&#8220;I haven&#8217;t overstepped and I think those will be the deliberations which we&#8217;ll be having further and again. I&#8217;ll see how the notice of motion, the content and why are they disputing that. We&#8217;ll take it from there,&#8221; Mkhwebane was quoted as saying.
Mkhwebane made her proposal on Monday as 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&#8217;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 row over the central bank&#8217;s role has also highlighted divisions in the tripartite political alliance of the ruling African National Congress party (ANC), the country&#8217;s biggest union, Cosatu, and the South African Communist Party (SACP).
Both the ANC and the SACP are opposed to altering the role of the central bank while Cosatu has backed calls for changes.
(Reporting by Olivia Kumwenda-Mtambo; Editing by Helen Popper)

South Africa anti-graft chief open to talks on central bank -report

What kind of financial system is sure to collapse if the central bank cares about people’s well-being?
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.
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”.
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.
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.
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.
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.
<h2>An important debate</h2>
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.
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.
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.
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.
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”.
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.
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.
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.
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).
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.
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”.
<h2>Closing down debate is common</h2>
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?
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.
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.
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.
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.

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

JOHANNESBURG (Reuters) &#8211; Barclays Africa warned on Wednesday against proposed changes to the South Africa Reserve Bank&#8217;s primary mandate, saying amendments recommended by an anti-graft agency posed a &#8220;very serious risk&#8221; to the financial system.
The South African-based lender also said it would challenge in court a finding by the agency, published in a report this week, that Barclays had unduly benefited from an apartheid-era bailout.
Public Protector Busisiwe Mkhwebane, head of South Africa&#8217;s constitutionally-sanctioned anti-graft watchdog, called on Monday for the central bank&#8217;s mandate of maintaining currency and price stability to be changed to focus on economic growth.
&#8220;Her recommended amendments pose a very serious risk to the financial system and they cannot be allowed to stand,&#8221; Barclays Africa said in a statement.
The ruling African National Congress&#8217;s secretary general Gwede Mantashe and the central bank itself have also criticised Mkhwebane&#8217;s proposal, which has further stained South Africa&#8217;s image as an investor-friendly emerging market, coming less than a week after Mines Minister Mosebenzi Zwane spooked mining investors with a revised plan to revamp the sector&#8217;s black ownership rules.
Mkhwebane made her recommendation in a report by the agency, published on Monday, which also said the apartheid government breached the constitution by supplying Bankorp, which was acquired by Absa, now Barclays Africa, in 1992, with a series of bailouts from 1985 to 1995. She said Barclays Africa must pay 1.1 billion rand ($84 million).
Barclays Africa denied any wrongdoing.
&#8220;This is due to numerous misrepresentations and factual inaccuracies which form the basis of the Public Protector&#8217;s findings, and what we submit are the irrational and unreasonable legal conclusions in the report,&#8221; the bank said in its statement on Wednesday.
($1 = 13.0520 rand)
(Reporting by Tiisetso Motsoeneng; Editing by Christian Schmollinger and Susan Fenton)

Barclays Africa warns against changes to South African central bank mandate

After consultation with its legal team, Absa has decided to approach the High Court in order to have the report of the Public Protector that was released on Monday 19 June 2017 reviewed and set aside. This is due to the numerous misrepresentations and factual inaccuracies which are used as the basis for its findings, and what we submit are the report&#8217;s clearly irrational and unreasonable legal conclusions.
Absa respects constitutional institutions and has to date done everything possible to cooperate with the Office of the Public Protector during the course of this investigation. However the report leaves Absa with no choice but to seek recourse in the courts as provided for by the Constitution when an affected party disagrees with the findings of the Public Protector.
The office of the Public Protector appears to have either effectively ignored or misunderstood Absa’s detailed submissions, which were made to it on two occasions. A copy of our February 2017 submission has been released to the public.
We also note that the Public Protector’s remedial actions include a directive to Parliament to amend the Constitution in order to change the mandate of the South African Reserve Bank. We are advised that the Public Protector Act does not empower the Public Protector to direct that constitutional amendments be made. Her recommended amendments pose a very serious risk to the financial system and they cannot be allowed to stand.
It is noteworthy that the report’s findings and remedial actions in relation to Absa are mainly premised on the conclusions of the Davis Panel of Experts, which delivered a comprehensive report on the same matter in February 2002. The Public Protector also uses the statement of the Heath Special Investigating Unit as a further basis for her conclusions on Absa.
In the case of the Davis Panel, the Public Protector’s final report misrepresents or misconstrues its findings. While it concluded that the manner in which the assistance was provided to Bankorp was unlawful (ultra vires), the Davis Panel unequivocally found that Absa is not liable to pay because it paid fair value for Bankorp.
The Davis Panel Report reads as follows:
“The Reserve Bank’s assistance conferred benefits on Sanlam’s policy holders, its pension fund beneficiaries and on the minority shareholders of Bankorp. That is contrary to public perception published in the media, and contrary to the conclusions of the Heath Special Investigative Unit. Those perceptions and conclusions have incorrectly asserted that major benefits were received by the shareholders of Absa.”
It goes on to say:
“The Panel is of the view that Absa paid for the continued assistance of Bankorp by the Reserve Bank and could not be regarded as beneficiaries of Reserve Bank assistance package. Absa paid fair value for Bankorp. Due to the complex nature of the impact that the various packages might have had on the value of capital invested in Bankorp, it is difficult for the Panel to assess with accuracy, the extent of the benefits derived by Bankorp shareholders. 
Evidence supports the conclusion that Sanlam, the major Bankorp shareholder was aware that it would have received no value, or less value, for its shareholding absent Reserve Bank assistance.”
While the Public Protector’s final report accepts large parts of the Davis Panel Report as a basis for its findings and remedial actions, the report fails to explain why the rest of the Davis Panel’s findings on Absa are not accepted. In this respect, the Public Protector’s report appears irrational. The Public Protector’s final report not only omits the rest of the Davis Panel’s finding, it also does not explain how it comes to the diametrically opposite conclusion that Absa’s shareholders unduly benefited, rather than Sanlam’s policy holders and pension fund beneficiaries – which is what the Davis Panel found.
It is also noteworthy that in the provisional report that was leaked in January 2017, the office of the Public Protector had relied on the alleged testimony of former SA Reserve Bank Governor Dr Chris Stals. In that report, it was claimed that Dr Stals had testified that the Bankorp/Absa loan was at an interest rate of 16% instead of 1%, and that he had produced a contract to support this. Dr Stals strongly refuted the claim in the media shortly thereafter.
The alleged testimony of Dr Stals and the document he was said to have produced are conspicuously absent from the final report. In the final report this basis is abandoned and instead it selectively relies on a report that in any case found that Absa is not liable.
Ahead of our submissions to the Public Protector, we requested access to documents in her possession that had a material impact on our position. That request was unjustifiably refused. The Public Protector’s report’s assertion that its findings are not in dispute, when Absa was never given insight into, let alone the opportunity to dispute what is supposedly contained in those documents, is therefore contested.
In any event the information upon which the report bases its findings is not new. It was at the disposal of the Public Protector’s office before the findings in the provisional report were made. It appears that this information was not regarded as relevant at the time.
The misconceptions and inaccuracies in the report are profound and damaging to Absa’s reputation. We have instructed our lawyers to immediately prepare an application to the High Court to have the report&#8217;s findings and its remedial actions (including the remedial action concerning the intervention of the Special Investigative Unit and the amendment of the Constitution) reviewed and set aside.
We firmly maintain our position &#8211; supported by uncontroverted evidence – that Absa met all its obligations to the SA Reserve Bank in full by October 1995.

Absa to seek High Court review of Public Protector’s report

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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.

ABSA seeks high court review of CIEX report

Comments by the Public Protector relating to the mandate of the SA Reserve Bank are particularly alarming.
The role and independence of the SARB is critical in maintaining what little certainty remains in our already fragile economy. The banking sector has repeatedly emphasized this point; and once again objects in the strongest possible terms to any interference in the operations and function of the SARB.
In our view, the Public Protector has erred in making comments and recommendations about the Constitutional mandate of the Reserve Bank and its relationship with National Treasury. It is not the role of the Public Protector to pronounce on these matters. In her eagerness to demonstrate her independence and bare her teeth, she has gone too far.
We urge Parliament to confirm the independence of SARB and assure the public and investor community that this critical institution will not be compromised. The SARB sits at the apex of a banking system that is highly regarded globally and we must do everything in our power not to cast doubt on a system that has served our country very well during difficult times, including the global financial crisis.
Although important, monetary policy is not the only critical factor in promoting economic growth. Other critical factors for growth include investment friendly policies and their effective implementation. South Africa has a long way to go if we are to emerge from junk status.
It is also important for government, business and labor to work together to promote inclusive growth. We need to focus our attention on measures necessary to get the country out of junk status and the comments of the Public Protector are as regrettable as they are irresponsible as they distract our attention from this important task.

Banking Association South Africa response to the Public Protector’s comments on the mandate of SARB

JOHANNESBURG (Reuters) &#8211; South Africa&#8217;s central bank said on Tuesday a recommendation by the Public Protector to change the constitution to promote growth was unlawful and would hit the regulator&#8217;s independence by stripping it of its key aim to protect the currency.
&#8220;The Reserve Bank has consulted its legal team and has been advised that the remedial action prescribed by the Public Protector falls outside her powers and is unlawful,&#8221; it said in a statement.
It would take urgent legal action, it added.
On Monday, Public Protector Busisiwe Mkhwebane proposed a change to the bank&#8217;s mandate as part of her findings on an apartheid-era bailout of a bank that was subsequently bought by Absa, now a unit of Barclays Africa Group.
http://cnbc.africa/news/financial/2017/06/19/barclays-africa-says-no-obligation-pay-sa-govt/
(Reporting by Mfuneko Toyana; Editing by Ed Cropley)
&nbsp;

South Africa central bank hits back against Public Protector

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Public Protector Busisiwe Mkhwebane said she would seek that the SARB&#8217;s mandate be changed from protecting the value of the rand to a focus on the protection of &#8220;citizens&#8217; socio-economic wellbeing&#8221;.

S.A Public protector pushes for SARB mandate change

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Fixed Income Specialist Gordon Kerr discusses the implications of Public Protector Busisiwe Mkhwebane&#8217;s recommended changes to the constitution to force the SARB to promote economic growth rather than currency and price stability on the rand.

How SA’s Public Protector’s comments on the Reserve Bank blindsided the market

South Africa&#8217;s rand fell more than 1.5 percent on Monday after Public Protector Busisiwe Mkhwebane recommended changes to the constitution to force the central bank to promote economic growth rather than currency and price stability.
By 1222 GMT, the rand was trading 1.44 percent weaker to the dollar at 12.9900, having hit 13.0075.
Mkhwebane said at a news conference that the primary objective of the South African Reserve Bank should be to promote balanced and sustainable economic growth, rather than to target inflation, as it is now.
It is unclear why Mkhwebane, a constitutionally mandated anti-corruption watchdog, should have made the comments, which alarmed currency traders.
&#8220;They want to initiate changes to alter the primary objective of the Reserve Bank. Some of the suggestions being to remove the reference to protect the value of the currency and all this has caused a knee-jerk reaction,&#8221; said Andre Botha, Treasury One currency dealer.
(Reporting by Tanisha Heiberg and Olwethu Boso; Writing by James Macharia; Editing by Ed Cropley)

S.Africa’s rand weakens 1.5 pct after watchdog comments over cenbank

PRETORIA (Reuters) &#8211; Barclays Africa Group unduly benefited from apartheid-era bailouts and must repay 1.1 billion rand ($86 million), South Africa&#8217;s anti-graft watchdog said on Monday.
Public Protector Busisiwe Mkhwebane in January reopened a probe of Barclays South Africa following a wider report published last November by her predecessor.
She said on Monday that the probe had found that the apartheid government breached the constitution by supplying Bankorp, which was acquired by Barclays Africa unit Absa in 1992, with a series of bailouts from 1986 to 1995.
Barclays Africa would have to pay 1.1 billion rand ($86 million), Mkhwebane said, adding that her office had referred the matter to the Special Investigating Unit to help recover the money.
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<h2>Barclays Africa response to Public Protector’s Press Conference</h2>
Absa has noted the Public Protector’s statement today regarding her investigation into the SA Reserve Bank’s assistance to Bankorp between 1985 and 1995. Absa acquired Bankorp in April 1992. We have not yet received a copy of the report and we are urgently requesting the Public Protector’s Office to send it to us. Once we have read it we will consider our legal options including seeking a High Court review.
Absa met all its obligations in respect of the loan provided by the SA Reserve Bank by October 1995. It is our firm position that there is no obligation to pay anything to the SA government.
(Reporting by Dinky Mkhize; writing by Ed Stoddard and Tiisetso Motsoeneng; editing by James Macharia and Jason Neely)

Barclays Africa says “no obligation” to pay SA govt

JOHANNESBURG (Reuters) &#8211; South Africa&#8217;s anti-corruption watchdog will oppose President Jacob Zuma&#8217;s court bid to set aside an influence-peddling report, Public Protector Busisiwe Mkhwebane said on Monday.
The Public Protector, a constitutionally-mandated watchdog, released the report in November last year, after an extensive probe over allegations of influence-peddling against Zuma, whose administration has been marred by scandals.
The carefully worded report by Thuli Madonsela, Mkhwebane predecessor, stopped short of asserting that crimes had been committed and called for a judge to investigate the allegations. Zuma has denied any wrongdoing, and is challenging the Public Protector&#8217;s report in court.
(Reporting by Tiisetso Motsoeneng; Writing by Ed Stoddard; Editing by James Macharia)

South Africa watchdog to oppose Zuma bid to set aside influence peddling report

JOHANNESBURG (Reuters) &#8211; South Africa&#8217;s Public Protector has launched a new investigation 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.
The Public Protector&#8217;s office said in a statement on Wednesday it was investigating these allegations within Eskom, Transnet and The Passenger Rail Agency of South Africa (PRASA).
Allegations of government corruption have escalated this month after local media began reporting on more than 100,000 leaked emails they say show inappropriate interference by the wealthy Gupta family and ministers in the issuing of lucrative tenders.
&#8220;The Public Protector South Africa, Advocate Busisiwe Mkhwebane, has decided to conduct a preliminary investigation for the purpose of determining the merits of the several allegations published in the media,&#8221; the protector&#8217;s office said.
The latest allegations of influence-peddling are deepening a divide in the ANC as factions jostle for control before a conference in December where President Jacob Zuma&#8217;s successor as party leader will be chosen.
The investigation by the anti-corruption watchdog will focus on allegations of &#8220;improper or dishonest act&#8221; with respect to the public funds at Eskom, PRASA and Transnet and &#8220;unlawful enrichment&#8221; by certain public officials at the firms, it said.
The investigation will also look at the re-appointment of Brian Molefe as chief executive of Eskom, the state power company, amid graft allegations. He was reinstated last month, but ministers then reversed his reinstatement.
Molefe has denied wrongdoing and the Gupta family, who are friends of Zuma, and its companies have also denied all allegations of influence-peddling or improper dealings.
Most of the allegations form part of &#8220;The State Capture&#8221; report by the Public Protector, released last year on Nov. 2, focusing on allegations that businessmen brothers Ajay, Atul and Rajesh Gupta had influenced the appointment of ministers.
The report has been taken on judicial review by Zuma, mines minister Mosebenzi Zwane and Minister of Cooperative Governance and Traditional Affairs Desmond van Rooyen, the public protector said.
(Reporting by Nqobile Dludla; Editing by Chris Reese and Leslie Adler)

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