ANC demands change in central bank mandate to promote jobs, FM resists

South Africa's governing party refused to back down on Wednesday, June 5 from a call to mandate the central bank to enhance employment, despite the finance minister denying such plans and saying talk of them would "destabilise the market". The African National Congress announced a call on Tuesday for a change to the mandate of the South African Reserve Bank to promote growth and jobs. With investors nervous about any moves towards populist policymaking, that caused the rand currency to fall and measures of its volatility to spike.

Finance Minister Tito Mboweni told reporters in Johannesburg there were no plans to change the bank's mandate. "Nobody is talking about changing the mandate of the Reserve Bank," he said. "I don't understand why the obsession about the central bank. ... Why are we saying things we know are going to destabilise the market?"

Central bank governor Lesetja Kganyago said: "The constitution outlines the primary mandate of the Reserve Bank, being to protect the value of the currency in the interests of balanced and sustainable growth." But ANC spokesman Pule Mabe said that the governing party was sticking to the statement read out on Tuesday by its Secretary General Ace Magashule.

Magashule had announced that the party's executive had agreed to broaden the bank's mandate "beyond price stability to include growth and employment". Mabe told television channel eNCA: "The ANC has only issued one statement. The statement ... which was read out by the ANC secretary general is the statement of the African National Congress."

The ANC would bring together senior economic officials for a meeting at its headquarters to make sure they were "reading from the same script", Mabe added. Magashule's comments had been contradicted on Tuesday by a senior ANC economic official, Enoch Godongwana, who said they were inaccurate.

The debate over how the central bank should conduct its monetary policy has resurfaced as data showed on Tuesday that economy suffered its sharpest contraction in a decade in the first quarter. President Cyril Ramaphosa has failed to re-ignite economic growth as he pledged when campaigning for ANC leader, making him vulnerable to attacks from rivals within his party who want to see him pursue a more radical approach.

The South African Communist Party (SACP), a key ANC ally, said on Wednesday that it agreed with Magashule that the central bank's mandate should be expanded. It said in a statement: "The mandate of the South African Reserve Bank must explicitly include employment growth targeting – with a consequential amendment to the Reserve Bank Act."