Corruption watchdog’s attack on central bank stuns South Africa | Reuters

By Ed Cropley

JOHANNESBURG In eight months as the head of South Africa’s anti-graft agency, Busisiwe Mkhwebane, has avoided the limelight, a break from her predecessor whose dogged pursuit of corruption cases against President Jacob Zuma made her a household name.

That changed this week when Mkhwebane, an advocate with 20 years experience, slid a monetary policy bombshell into the findings of an investigation into an apartheid-era bailout of a bank bought by Barclays Africa Group (BGAJ.J).

At the end of a 56-page summary of the probe the Public Protector launched an attack on the South African Reserve Bank (SARB) and its constitutional obligation to protect the rand, a central pillar of the post-apartheid state.

Specifically, Mkhwebane proposed changing the constitution to remove the phrase “to protect the value of the currency” from the definition of the SARB’s primary role.

Instead, it should define the bank’s main objective as promoting “balanced and sustainable economic growth… while ensuring that the socio-economic well-being of the citizens are protected”, she said.

That set alarm bells ringing for many South Africans concerned that the change could lead to money printing and threaten the SARB’s independence. The central bank’s inflation targeting has long been derided by leftists from Zuma’s ruling ANC party who see a weak currency as an economic panacea.

Former SARB Governor Tito Mboweni was incensed, pointing to political skulduggery ahead of ANC elections in December that will replace Zuma, facing a series of scandals, as party leader.

“When we negotiated our sovereign constitution, we entered into a covenant about the independence of the SA Reserve Bank,” he wrote in an essay.

“It is unwise to try and change this at the slightest political provocation. It is a very serious matter for our beloved country. Please think carefully about this.”

Mboweni, who was also instrumental in smoothing South Africa’s return to the…

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