It is not enough to dismiss or celebrate the arguments made by Minister Tito Mboweni and Enoch Godongwane on The independence of The South African Reserve Bank (SARB), we must equally ask Why such passion because their arguments are not innocent?
South Africa is caught in a debt trap and we don’t know the commitments that National Treasury has with lenders against the loans they have taken on behalf of our country. According to the South African Reserve Bank, the net debt for 2017/2018 fiscal year was expected to have increased to R2.28 trillion. As ordinary citizens including some in the leadership of the ruling party, we don’t have full disclosure of debt covenants (restrictions imposed by lenders) that National Treasury has signed on our behalf.
We just don’t know how South Africa’s Sovereign debt is financed, It is the likes of Minister Tito Mboweni who are privy to such information.
It is therefore not a coincidence that Minister Tito Mboweni and Enoch Godongwane have to this day passionately defended the independence of The South African Reserve Bank(SARB). What is unfortunate is that those who are calling for Nationalisation of The South African Reserve Bank or for SARB to change its mandate might not even be asking the right questions. As such the likes of Minister Mboweni might not necessarily be interested in whether the South African Reserve Bank mandate is changed or not but rather on South Africans finding out what they have committed too with lenders; and in all likelihood one of the concessions might include The continuous Independence of The South African Reserve Bank at all cost.
We must not also concede to the argument that The Independence of The South African Reserve Bank is protected by the constitution lest we forget how the privilege came about. In 1993 Minister Pravin Gordhan in his capacity as Chair of what was then called the Transactional Executive Council (TEC) signed an R850 million Loan with The International Monetary Fund (IMF) to pay off the apartheid debt. As part of the conditions of the loan, Gordhan signed a letter of intent assuring the IMF that when the ANC got into power it would implement sound fiscal and economic reforms which included; The Independence of The Reserve Bank and the Public Investment Corporation, Protection of Intellectual and Property Rights, Privatisation of State-Owned entities, lowering corporate Taxes, relaxing exchange controls et cetera.
The impact of the debt and the loan on South Africa’s sovereignty, service delivery and governance were lamented by former South African President Nelson Mandela when he said “We are limited in South Africa because our democratic Government inherited a debt which at the time we were servicing at the rate of 30 billion rands a year. That is thirty billion we did not have to build houses, to make sure our children go to the best schools, and to ensure that everybody has the dignity of having a job and a decent income.” (ACTSA 2002). All likelihood was that Mandela did not even know about the conditions of the debt.
What does this all mean? It might likely mean that South Africa is not a sovereign country, that those who have been making economic decisions on our behalf that we call comrades such as Minister Tito Mboweni and Enoch Godongwane have literally handed over our country to financiers and creditors who dictate on our countries economic trajectory.
It also means that progressive and well-meaning South Africans must start to demand the conditions of funding of our debt so that we better understand the chains that bind us; To better understand why some ANC leaders will fight tooth and nail to go against their own historical party conference resolutions.
How much of our country has been sold and what happens if we default?
We can no longer afford to be passive observers in our own economic liberation.
Zemke Inkomo Magwalandini