The tug-of-war between reformists and the remnants of the rent-seeking faction in the ANC, the latter led by secretary general Ace Magashule, will continue to erode confidence in South Africa and deepen policy uncertainty, a key stumbling block in the country’s pursuit of inclusive growth.
The attack on the Reserve Bank began in Jacob Zuma’s second term as president, when he ramped up the state capture project to enable wholesale looting by his friends, the Gupta family. His son, Duduzane Zuma, was primed to be a direct beneficiary of that looting.
Reserve Bank governor Lesetja Kganyago, speaking earlier this year, gave a hair-raising account of how the closure of the Gupta family bank accounts and their attempt to obtain a banking licence placed the central bank squarely in the sights of this rent-seeking faction.
He said the Reserve Bank was even threatened with the removal of bank licensing from its arsenal of responsibilities. “We were using our independence to uphold a law against dirty money flows, and that made us enemies.”
The attack culminated in the rent-seekers in the ANC pushing for and winning a policy battle to nationalise the bank at the party’s Nasrec conference.
What is startling about the sorry tale in which the Reserve Bank has become enmeshed is that there is no principle behind the noises from this faction. President Cyril Ramaphosa and his supporters are forced to defend the Reserve Bank in the face of an illogical and insidious onslaught. And, mirroring the removal of Nhlanhla Nene as finance minister by Zuma in a bid to capture the treasury, the economy was the biggest loser.
The party’s most significant electoral losses followed its mismanagement of the economy. The economy has not recovered and the ANC is at it again. It has learned nothing from the punishment it received in the last two elections, local and general. An all-out electoral loss is fast becoming inevitable.