SA suffers from a serious “execution deficit” and fails to discuss the trade-offs which are necessary when making decisions in the context of limited resources, Reserve Bank governor Lesetja Kganyago says.
The governor was questioned on Wednesday on a wide range of topics by Wits Business School’s international business and strategy professor Mills Soko and members of the public during the school’s virtual leadership dialogues programme.
Kganyago noted that he had participated in the formulation of three economic growth development strategies starting from the Reconstruction & Development Programme and after that there had been the new growth path and the National Development Plan. “I don’t know what other plan is now going to be coming,” he said.
“What is in no doubt is that we do have thinking capacity but we are running a serious execution deficit. Sometimes you run an execution deficit because you set yourself things that are just impossible to achieve.”
Kganyago said there was a failure in SA policy discourse to frame the trade-offs that are necessary in any decision-making. Policy issues were picked up which involved expenditure without considering what effect this would have in other areas in a situation of finite resources.
“The tragedy of the SA discourse at the moment is that we think everything is a priority and (therefore) we cannot engage with society so that society understands that there are trade-offs to be made.”
He said the political leadership of the country needed to frame the trade-offs. “We seem to give South Africans an impression that this country can do everything and provide everything and not have difficult conversations with society, that society must make choices.”
Questioned about his view of the ANC’s drive to establish a state-owned bank, Kganyago said this was a decision for government, but the Reserve Bank would adjudicate such a bank’s application for a banking licence in terms of the Banks Act on the same basis as all other banks.
He pointed out however that there was already a raft of banking institutions owned by the state such as the Industrial Development Corporation, the Development Bank of Southern Africa, National Housing Finance Corporation and the Post Bank and questioned what gap the government wanted to fill with another state-owned bank.
He said that the Reserve Bank would have to regulate crypto assets and was looking at the possible introduction of a digital currency for retail use. Many central banks were looking at a central bank issued digital currency to supplement the notes and coins.
On the Reserve Bank, he said it was accountable to parliament and engaged with it once or twice a year but would like to have more engagements.
Kganyago mentioned as some of his achievements the building of a “formidable” institution at the National Treasury when he was director-general, such that SA is ranked number three in the world for its budgetary transparency. Likewise the Reserve Bank stands tall in the community of central banks about the world.
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