Ramaphosa slams Mkhwebane’s Reserve Bank plan

2017-06-23 21:23
Deputy President Cyril Ramaphosa. (File, Leon Sadiki, City Press)

Deputy President Cyril Ramaphosa. (File, Leon Sadiki, City Press)

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Johannesburg - Deputy President Cyril Ramaphosa has slammed Public Protector Busisiwe Mkhwebane’s suggestion that the Constitution be amended to change the mandate of the SA Reserve Bank.

In a speech delivered at the SA Communist Party’s Gala Dinner on the East Rand on Friday night, Ramaphosa said the country’s Constitution should not be tampered with.

"We must view with concern suggestions that the constitutional mandate of institutions like the Reserve Bank should be summarily changed.

"These are matters that must be approached deliberately, supported by evidence, buttressed by solid arguments, and widely canvassed," he said.

He added that such a suggestion needed to be approached with a comprehensive understanding of the contribution that institutions such as the Reserve Bank made to the stability of the economy.

"And, hence, the contribution that such institutions make to our ability to fulfil our mandate for fundamental transformation."

On Monday, Mkhwebane released findings of a probe into a bailout for Bankorp in the 1980s, which was later bought by Absa. She recommended that the Special Investigating Unit begin procedures aimed at recovering the money.

Absa denies that it owed SARB R1.125bn, saying it met that obligation by October 1995.

Mkhwebane also recommended that Parliament amend a paragraph in the Constitution that removes reference to "protect the value of the currency".

'We must diversify our economy'

Ramaphosa also took a swipe at those using government resources for personal use.

"We occupy positions of responsibility solely at the behest of the people and solely to serve their interests.

"The resources that we have to deploy, to manage and to account for, belong to the people and may only be used to improve their lives.

"They may not be used to benefit ourselves or our friends," he said.

He said the policies government adopted, the laws it enacted, and the regulations it enforced were solely intended to serve the needs of the people.

"They are not meant to secure advantage for narrow interests or unduly benefit those that are well-connected."

The notion that State entities were being used to divert contracts to particular individuals and families could not be accepted "in any manner, shape or form," he said.

"We must not make a similar mistake, thinking that the constitutional covenant on which our democratic nation is built can be readily changed to serve parochial interests."

Ramaphosa also touched on the economy, saying that South Africans needed to care about matters such as investor confidence, sovereign credit ratings and competitiveness rankings.

However, at the same time, the government needed to "act with purpose and speed to fundamentally change the structure of our economy".

He warned against the undoing of the concentration of economic power in the hands of white, mostly male, South Africans, without addressing the dominance of a few companies of critical sectors of the economy.

"We must diversify our economy, both in terms of who owns, controls and benefits from it, but also in terms of what it produces, manufactures and exports."

Mining Charter

Ramaphosa then addressed the new, highly contentious Mining Charter revealed by Mineral Resources Minister Mosebenzi Zwane on Thursday last week, which increases the level of black ownership at mining companies from 26% to 30%.

"If we are to succeed in transforming an industry like mining, we need to make sure that the process is inclusive and the outcomes broadly accepted," he said.

The Charter required that mining prospecting rights needed to have a minimum of 50 plus one, while companies would be required to give 8% of their shares to workers.

Zwane pointed out that mining companies which already have a 30% black ownership would not be required to restructure their ownership structures.

It also required mining companies to pay 1% to the 30% black shareholdings over and above any distributions to its shareholders.

"This 1% is to ensure real economic value to these black owners," Zwane said, but it would be subject to liquidity tests.

New empowerment targets, with respect to black representation, were also set. A minimum of 50% black representation at board level would be required, of which 25% need to be women.

At senior management level, a minimum of 60% black ownership was required, while 88% of black ownership was required at junior management level.

The charter also required 70% procurement of mining goods from black economic empowerment companies.

'We engaged financial institutions'

Zwane said the department had listened to workers and communities who had not seen real economic benefits from mining activities.

"We engaged financial institutions who need to make profit, but also address developmental needs. We also listened to the sector who asked for policy certainty, but also wanted clarity on historic deals."

The black ownership matter had been a bone of contention for a number of years and the Chamber of Mines had in the past spoken about approaching the courts for a declaratory order in respect of the once empowered-always-empowered principle.

In the previous draft charter, mining companies were supposed to have a perpetual 26% black ownership, even if the original empowerment company disposed of its shares.

The Chamber had held the belief that once it had met the empowerment criteria they should be exempted from further empowerment obligations.

The new Mining Charter has caused considerable unhappiness in the mining industry, which claimed it has not been properly consulted before its publication.

The Chamber of Mines, which represents 90% of South Africa’s mines, issued a statement slamming the process followed by the DMR in drafting the latest version of the Charter.

During a question and answer session in the National Assembly on Thursday, President Jacob Zuma endorsed the new Charter, saying the revised regulations were drawn up in consultation with Cabinet.

The ANC also suggested that Zwane did not consult with the ruling party’s economic transformation committee before releasing the charter, and said it is concerned about its impact on employment.

Read more on:    busisiwe mkhwebane  |  mosebenzi zwane  |  cyril ramaphosa  |  politics

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