Economics is a complex subject and not everyone knows the intricacies of what nationalisation of the SA Reserve Bank or broadening of its mandate means.
Precisely because of this, there was lots of voodoo economics doing the rounds in South Africa this week, including from no less than the office of ANC secretary-general Ace Magashule, who introduced us to the new term of “quantity easing”.
The whole of this week saw ANC head honchos fighting over what had been discussed at the ANC lekgotla, especially over the mandate of the Reserve Bank.
Magashule’s statement from the lekgotla was disputed by Finance Minister Tito Mboweni and ANC head of policy Enoch Godongwana, who accused Magashule of lying about the outcomes of the discussions.
The rest of us are now confused about who is lying and who is telling the truth. But what we know is that Magashule’s statements sent panic across the markets and international institutions, causing the rand to depreciate.
The ANC’s top six finally sought to clarify and allay fears by issuing this statement: “It is our desire for the SA Reserve Bank to be publicly owned. However, we recognise that this will come at a cost, which, given our current economic and fiscal situation, is not prudent.”
However, by this time, the horse had already bolted. The dispute appears not to be so much about what was said inside meetings as it is about deep-seated factional battles in the ANC. Each faction seems to believe it had the last word and that its view prevailed.
Fuelling the dispute appears to be a section of the ANC that does not trust President Cyril Ramaphosa to implement resolutions from the past party conference. His every move is viewed with suspicion. Ramaphosa, for his part, appears to be saying that much.
While he remains loyal to all resolutions in his utterances, he has to deal with the real work of running the country, and any ill-advised decisions could be crippling.
All sides need to appreciate that their factional battles should not affect the economy. Their internal power fights are probably unstoppable, but they must not be allowed to take the rest of the country down with them.
They are free to differ in their lekgotlas, but, once that ends, they should communicate with one voice in a manner that does not suggest we are just another banana republic.