President Cyril Ramaphosa has reappointed Lesetja Kganyago in his role as the governor of the South African Reserve Bank (SARB).
According to a statement issued by the Presidency on Friday, “The re-appointment of Governor Kganyago will ensure continuity and institutional stability at the Reserve Bank. Furthermore, the President has re-appointed Ms Nomfundo Tshazibana and Dr Rashad Ismail Cassim as Deputy Governors of the South African Reserve Bank for a period of five years with effect from 1 August 2024.”
Reacting to the news, political analyst Lunga Mrhetjha said the re-appointment of Kganyago comes as no surprise at all – suggesting that it was almost expected.
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“Besides his problematic approach to monetary policy, an even bigger problem is the institutional culture of the organization that he leads. This is a problem that supersedes him and it’s embedded in the framework of SARB since the times when its mandate was changed in 2000 to focus solely on inflation targeting,” Mrhetjha told Vulankungu news.
The Pan-Afrikanist analyst is adamant that SARB, at some point, must undergo a process of transformation, stressing that its mandate must be expanded to include full employment.
“SARB says it uses the US’ Taylor rule to determine interest rate levels but for unemployment, it accepts it doesn’t use NAIRU [Non-Accelerating Inflation Rate of Unemployment]. It uses the output gap in conjunction with inflation rate targeting – what the inflation is currently and where they’d like to see in the future.”
He further argued that SARB cannot pick and choose what they like and/or don’t like from the legal framework of The Fed.
“They must adopt its model holistically or abandon it altogether and choose its own path. This path must be rooted in the socioeconomic conditions of South Africa and the development of her people. This includes job creation and growing the economy, while maintaining price stability,” Mrhetjha concluded.
