JOHANNESBURG, Jan 13 (Reuters) – South Africa’s African National Congress (ANC) hinted at a greater focus on job creation by the country’s central bank in resolutions at its recent national conference, but refrained from calling for the modification of its mandate.
ANC officials have been toying with the idea of expanding the central bank’s mandate for years as the ruling party struggles to bring down the unemployment rate, which officially stands at 33% (ZAUNR=ECI) and is among the highest in the world.
Economic transformation resolutions seen by Reuters on Friday said the South African Reserve Bank (SARB) should implement monetary policy “in a balanced manner, taking into account the factors of growth, employment and rates of return.” exchange”.
The main objective of the central bank, as stated in the constitution, is currently “to protect the value of the currency in the interest of balanced and sustainable economic growth”.
The debate has baffled investors as the bank has a strong reputation for acting independently, and the drive to change the mandate has been used as a weapon in factional battles within the ANC.
In an apparent attempt to allay such fears, resolutions from the ANC conference which ended last week said the “constitutional independence of the SARB must be reaffirmed”.
The ANC still wants to end private ownership of the SARB, but has said it will do so without overburdening public finances.
Finance Minister Enoch Godongwana told Reuters on Thursday that the party wants the central bank’s role to “explicitly” include job creation, even though its current mandate implicitly implies it by mentioning sustainable growth.
Another key goal of the ANC conference resolutions was to end crippling blackouts, which are a major source of public frustration and a drag on growth.
“Immediate actions are needed to bring power plants into efficient operation and improve the skills base, including the supply of necessary external skills,” the party said.
President Cyril Ramaphosa, re-elected as party leader in December, has not significantly increased the rate of growth in the nearly five years since he became head of state in 2018, hampered by the power constraints, COVID-19 and ANC infighting.
The pandemic has seen an additional 10 million South Africans in need of social assistance as unemployment rose, and civil society has increasingly called for more to be done to help.
The resolutions suggested that the ANC was considering increasing social benefits, which had been hotly debated last year.
Reporting by Kopano Gumbi; Editing by Alexander Winning and Alexander Smith
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