Godongwana Says Central Bank Mandate Enough to Foster Job Growth

South African Finance Minister Enoch Godongwana said the central bank’s constitutional mandate to maintain price stability is sufficient to foster job creation, suggesting there’s no need for that directive to be expanded. Author of the article: Bloomberg News S’thembile Cele Enoch Godongwana, South Africa’s finance minister, during an interview in Cape Town, South Africa, on…
Godongwana Says Central Bank Mandate Enough to Foster Job Growth

South African Finance Minister Enoch Godongwana said the central bank’s constitutional mandate to maintain price stability is sufficient to foster job creation, suggesting there’s no need for that directive to be expanded.

Author of the article:

Bloomberg News

S’thembile Cele

Enoch Godongwana, South Africa’s finance minister, during an interview in Cape Town, South Africa, on Wednesday, Feb. 23, 2022. South Africa cut corporate taxes and set more ambitious targets for reducing debt, after a surge in commodity prices led to higher-than-expected tax income. Photo by Dwayne Senior /Bloomberg

(Bloomberg) — South African Finance Minister Enoch Godongwana said the central bank’s constitutional mandate to maintain price stability is sufficient to foster job creation, suggesting there’s no need for that directive to be expanded.

The head of the governing African National Congress’s economic transformation committee last week raised the prospect of widening the South African Reserve Bank’s mandate to help create more jobs and support transformation in the nation’s financial industry. Godongwana chaired discussions by the committee about the issue at the ANC’s five-yearly policy conference over the weekend. 

Read: South Africa’s ANC to Consider Expanded Central Bank Mandate

“The mandate of the Reserve Bank is defined in the constitution” to maintain price stability in the interests of economic growth, he said in an interview Sunday. “You can then say in maintaining that stability in the interest of growth, you then must take into account that growth with employment generation, so there is nothing wrong with that.”

Godongwana’s comments are further evidence that President Cyril Ramaphosa, who is expected to stand for a second term as leader of the ANC at an elective conference in December, has managed to keep his economic policy intact despite opposition from within the party. A document seen by Bloomberg showed support for his plans to boost private participation in infrastructure and energy investments.

The mandate of the central bank has been a hot-button issue for the ANC, with opponents of its policies saying it’s focused too much on inflation at the expense of job creation.

South Africa has a 34.5% unemployment rate — the highest on a global list of 82 nations monitored by Bloomberg. The Thomas Piketty-backed World Inequality Lab ranks South Africa as the world’s most unequal nation for which wealth data is available. That’s a legacy of the apartheid system that limited economic opportunities for Black South Africans, who make up about four-fifths of the population, in favor of the country’s White minority.

The head of the ANC’s economic transformation committee, Mmamoloko Kubayi, also raised the prospect of increased engagement between the central bank and the National Treasury on policy matters. Godongwana said he communicates regularly with central bank Governor Lesetja Kganyago.

“I don’t have a problem with writing a letter to Lesetja but I can’t instruct Lesetja, the constitution does not allow me to do so,” Godongwana said. “We meet regularly so I am happy with the interaction.”

Other issues raised for discussion by the committee at the ANC conference included:

  • The introduction of a wealth tax as a possible way to minimize income and wealth inequality in South Africa
  • Feasibility studies into adding new refinery capacity, following the closing of existing facilities
  • The need to ensure that gas and nuclear power are considered as energy sources despite opposition from some critics who favor the sole use of renewable energy.

The issues raised by the committee will be discussed at the ANC’s elective conference in December, when it will appoint officials to lead the party for the next five years.

Financial Post Top Stories

Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Read More

Total
0
Shares
Leave a Reply

Your email address will not be published.

Related Posts
Landlords try to stop rent control initiative in Florida
Read More

Landlords try to stop rent control initiative in Florida

Author of the article: The Associated Press Mike Schneider FILE - In this Monday, May 19, 2014 photo, swans swim in Lake Eola as the sun sets in Orlando, Fla. Ballots haven't even been printed yet, but already a group of landlords and real estate agents in Florida are trying to stop voters from deciding…
Blackline Announces Upsize to Bought Deal Offering
Read More

Blackline Announces Upsize to Bought Deal Offering

Author of the article: NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES CALGARY, Alberta, Aug. 15, 2022 (GLOBE NEWSWIRE) — Blackline Safety Corp. (“Blackline” or the “Company“) (TSX: BLN) a global leader in connected safety, is pleased to announce that due to investor demand, it has amended the…
Belgian-backed group plans LNG terminal in northern Germany -Handelsblatt
Read More

Belgian-backed group plans LNG terminal in northern Germany -Handelsblatt

Author of the article: BERLIN — Hydrogen company Tree Energy Solutions (TES), backed by Belgian investor group AtlasInvest, said on Wednesday it would build an LNG terminal in the German North Sea port town of Wilhelmshaven, business newspaper Handelsblatt reported on Wednesday. The terminal is down to receive investments of 25 billion euros by 2045…
U.S. agrees to send advanced rockets to Ukraine
Read More

U.S. agrees to send advanced rockets to Ukraine

Author of the article: Reuters Pavel Polityuk and Max Hunder KYIV — Russian troops fought to take complete control of the eastern industrial city of Sievierodonetsk on Wednesday as the United States said it will provide Ukraine with advanced rockets to help it force Moscow to negotiate an end to the war. U.S. President Joe…