Mr Lesetja Kganyago is standing on the shoulders of apartheid giants like Dr Chris Stals
The statement by the Governor of the Reserve Bank, Mr Lesetja Kganyago that no one can change the independence of the South African reserve Bank and that they stand on the shoulders of the giants is evidence of what is wrong with the Reserve Bank. This level of condescension and obsolete bravado represents the most blatant disrespect fordemocratic institutions, which is not surprising from the unelected and undemocratic markets and their agents.
The only giants that Mr Kganyago and his friends are standing on top of are people like Dr Chris Stals and other apartheid “giants” , who ensured that the post 1994 dispensation was going to be about preserving the inherited privileges and ill-gotten gains of apartheid beneficiaries.
The source of the SARB’s power to pursue inflation is section 224 (1) of the Constitution which states that the primary object (or the mandate) of the South African Reserve Bank is to protect the value of the currency in the interest of balanced and sustainable economic growth in the Republic. (2) The South African Reserve Bank, in pursuit of its primary object, must perform its functions independently and without fear, favour or prejudice.
But it will be good to remember that prior to the adoption of the Constitution various apartheid commentators and intellectuals, including Dr Chris Stals the former Apartheid governor of the Reserve Bank, who served as a governor between 1989 and 1999 argued that the interest rate policy cannot be used on a discriminatory basis. For instance it should not favour certain groups in the society such as black farmers, black industrialists and black workers.
And that any intervention in the market should be through inflation targeting using interest rates to control inflation and not through administrative controls e.g. price and rent controls. It was argued that in order to ensure the independence of the Reserve Bank it should be protected by the Constitution a wish or demand, which was fulfilled through section 224(2).