Home General News ANC secretary-general Ace Magashule's Reserve Bank saga exposed

ANC secretary-general Ace Magashule's Reserve Bank saga exposed


ANC secretary-general Ace Magashule appears to have inserted parts of the damaging ANC national executive committee (NEC) lekgotla statement on the Reserve Bank that threw the rand into turmoil this week.

The statement, and the ensuing damage-control exercise by top party figures, among them President Cyril Ramaphosa, also cast a spotlight on divisions in the ruling party.

Now Ramaphosa’s allies want him to take decisive action against Magashule, and are proposing a revamp of the way the party communicates its decisions in the future.

Magashule’s insistence that the NEC lekgotla had resolved to expand the mandate of the Bank to include growth and employment appears to have been added by himself or members of his team in his office just moments before he addressed the media at Luthuli House on Tuesday.

The Sunday Times has seen the initial statement sent to Magashule by Luthuli House’s department of information and publicity (DIP). The statement Magashule read to the media included four new paragraphs.

A comparison of the two makes it obvious that the initial statement was substantially changed to include the Bank bombshell, which hammered the rand and raised new questions about SA’s fiscal policy.

Magashule, though, denied amending the statement. “I read the statement as is. I have not seen any other statement,” he said.

The Sunday Times understands that the initial statement was sent to Magashule’s office on Monday, when the lekgotla ended.

Magashule’s press briefing was then delayed for more than an hour on Tuesday, while he was locked up in his office with party spokesman Pule Mabe and MK Military Veterans Association spokesperson Carl Niehaus. It is believed that it was during this meeting that the changes that startled the markets were made to the original text.

Niehaus yesterday denied any role in the debacle. “I have made it several times clear that I am not responsible for the ANC’s communication. I know that a statement was prepared for the SG and the SG read that statement, and I was not part of any processes of changing that statement.”

Mabe, too, denied the existence of a statement besides that read out by Magashule.

“As the head of DIP, I have no knowledge of the existence of another statement except the one that the SG read. It is us who prepare statements, now where will the other statement come from? You have one DIP team that works with the SG’s office.

“I am also aware that Sunday Times spoke to the SG this morning and, like he said, the statement read by the SG was the final statement prepared. I am not aware of any other version,” Mabe said.

Mabe said the press briefing was delayed because of a march by ANC Youth League members outside Luthuli House.

But insiders said Magashule shocked even senior party leaders when he announced plans “to expand the mandate of the Reserve Bank beyond price stability to include growth and employment”. He also announced that the ANC government would “consider constituting a task team to explore quantity [sic] easing measures”.

This was a reference to quantitative easing, a measure used by central banks around the world, principally in the US, to print money after the 2008 debt crisis.

Magashule’s alleged additions, which sent the rand tumbling to below R15/$ for the first time since August last year, came in the same week that Stats SA released devastating figures on the dire state of the economy, showing it had contracted by 3.2% in the first quarter, its worst performance in 10 years, putting SA on track for recession.

It is not the first time Magashule has struck a dissenting note at odds with Ramaphosa’s reform drive. He was previously accused of doctoring the ANC election manifesto and the integrity commission’s list of tainted leaders.

Now, apart from reining in Magashule and revamping the party’s communications procedures, NEC members also want Magashule to be barred from speaking on the economy. Among measures being touted are that:

● The ANC presidency be made responsible for party communications and the secretary-general be allowed only to announce decisions of structures;

● ANC head of economic transformation Enoch Godongwana should be the only spokesperson on the economy; and

● All NEC statements should be read out and agreed to at committee meetings to ensure that no changes are made.

As the rand buckled this week, the markets looked to the ANC for direction and clarity on its Reserve Bank stance.

This came on Thursday, when the ANC’s top six, which includes Ramaphosa, met to plan a strategy to calm the markets.

This followed sharp rebukes from finance minister Tito Mboweni and Godongwana.

At the emergency meeting of the ANC top six, Magashule was taken to task. He apparently stuck to his guns, insisting that what he announced was in line with the resolutions of the ANC’s Nasrec conference in 2017.

After the meeting a draft statement by the president was worked on by Ramaphosa’s top officials, as well as ANC deputy secretary-general Jessie Duarte. It was agreed that

it would be issued by Ramaphosa himself through the head of his office in the ANC, Zizi Kodwa. Mabe was not allowed to do interviews on the statement.

Kodwa said Ramaphosa impressed on his fellow leaders the need to end the public spat on the Reserve Bank.

Kodwa said although the ANC lekgotla did discuss the role of the Bank in the economy, no decision was taken to expand its mandate. “The lekgotla has no powers to make policy decisions. Those issues were not part of what the meeting meant to discuss.”

He said Ramaphosa, during his closing remarks at the lekgotla on Monday, acknowledged the party’s Nasrec resolution to change the ownership of the bank.

“But responsible leadership implement resolutions in a responsible manner, including mitigating against negative impact of the resolution,” Kodwa said.

He revealed that Ramaphosa had told the meeting that nationalisation of the bank was unaffordable at the moment. Kodwa estimated it could cost between R50bn and R70bn.

“Will our fiscal afford it? The answer is no.”

NEC members said the issue of quantitative easing was raised by SACP deputy general secretary Solly Mapaila in the plenary, but not discussed further.

“In the president’s closing remarks, he mentioned that Solly had raised the issue of quantitative easing but he said this was a weighty matter and could not be decided. After the president expressly said this, it was a shock how it then got inserted into the media statement,” said an NEC member.

– Sunday Times

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