ANC and DIRCO is courting economic catastrophe through Russian alignment
30 May 2023
In the wake of the South African Reserve Bank's (SARB) Financial Stability Review, the ANC government's complacency towards global economic threats to our nation is laid bare. The SARB's warning of the potential devastation, by means of secondary sanctions, to our financial system as a consequence of the ANC's stance on the Ukrainian crisis is deeply alarming.
The threat of secondary sanctions could see South Africa banned from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, which processes more than 90% of our international payments. The ANC's imprudent alliances threaten to sever this critical lifeline and thereby jeopardise hundreds of billions of Rands in trade.
This precarious situation directly highlights how the ANC undermines the independence of the SARB, a principle that should remain inviolable and how the Government's actions have indirect yet profound impacts on its operation. By failing to cultivate a favourable fiscal environment and tacitly endorsing Russia’s invasion of Ukraine, the ANC is sabotaging any effort to combat inflation, indirectly influencing Monetary Policy Committee (MPC) outcomes.
The ANC's irresponsible stewardship clearly is the root cause of our economic woes, from our plummeting Rand to our heightened risk of sanctions. The party’s ill-advised decisions are not only further blunting our monetary instruments, but their political manoeuvrings have left the SARB's primary tool, the repo rate, ineffective.