Reserve Bank Governor Tito Mboweni theorised that the only people interested in the scrapping of exchange control are those who intend packing for Perth (September 28).
I trust a man of his obvious intelligence was in a good mood and speaking lightly. My question to academic economists: has exchange control cost South Africa, as a nation, more than the latest arms deal?
Exchange control has cost this country billions of rand money better spent on education, infrastructure, crime prevention and HIV/Aids awareness. It has cost the country in the following tangible areas:
l Money defrauded from all of us via round-tripping when we had a dual currency.
l The cost of the raft of bank employees and other advisers that monitor and keep exchange control in place costs that banks pass on to South African companies.
l South African money that lies dormant overseas, untaxed in off-shore trusts and attracting a low rate of return (except for currency depreciation gains) money better spent on investment in South Africa.
South African exporters and business people trying to build global companies to produce comparative advantages are hampered by Reserve Bank intervention on financial flows.
Overseas people in developed countries have not had exchange control for 30 years. It is regarded as illiberal state intervention.
I think Mr Mboweni has made a very good job of being governor, and I hope he does not seriously think that wealthy South Africans, of all races, have not already removed their funds from South Africa. The serious money moved out more than 15 years ago. The wealthy, corporate or individual, have set up structures to work their way around the controls. It is, as is the norm, the beginner and starter, and those too poor to move money offshore, who are penalised.
Were exchange control scrapped, South African offshore trusts taxed, and government less ham-fisted (in a few unfortunate areas), the currency would appreciate as funds found their way ”home”.
Could the bureaucrats not do something more useful than process bits of paper that confess that my Aunt Mabel sent me a Christmas gift? With time on their hands, they could come up with useful policies such as: scrap all South African currency less than the 50c coin a saving in itself.
Exchange controls infringe on our opportunities to do as we wish with our money to make the most of our lives no matter the government of the day. Were passbooks any different? Bovain Macnab, Cape Town