President Cyril Ramaphosa’s explanation that the alleged stash of foreign currency stolen from his Limpopo farm was from animal sales throws up more questions than answers.
For starters, sales of wild game and the Ankole cattle the president breeds, are typically conducted via auctions that involve formal processes and electronic payment. The notion that foreign buyers simply flew into SA or drove across the border to Limpopo, loaded up some big game on a truck and paid in cash with a bag full of dollars is unconvincing to the point of being laughable. That much is clear when one considers the onerous customs and excise, foreign exchange and disease prevention regulations put in place by the very bureaucracy Ramaphosa leads.
One only has to consider the hurdles Ramaphosa himself faced when trying to import Ankole cattle into SA in 2004 after seeing them on the farm of Uganda President Yoweri Museveni. After realising local animal disease protocols prevented him from importing the animals directly into SA, Ramaphosa transferred 43 of the cattle bought from Museveni to Kenya. Once there he had the cows artificially inseminated and the embryos imported into SA where they were implanted into local cattle, which later gave birth to Ramaphosa’s now (in)famous Ankole herd.
Given the bureaucratic hoops Ramaphosa had to jump through to import Ankole cattle into SA it seems logical to rule out the possibility that foreign buyers simply waltzed into the country to conduct laissez-faire cattle purchases in dollars. Local buyers also can’t simply transact in foreign currency without risking contravention of foreign exchange regulations. Yet this is the story Ramaphosa appears to be trying to pass off to a sceptical public.
“I’m in the cattle business and the game business and through that business, which has been declared in parliament and all over, I buy and I sell animals,” Ramaphosa told the ANC’s Limpopo elective conference on June 5. “The sales are sometimes through cash and sometimes through transfers. Some of the people who are offshore customers, and who are sometimes local, they come through and buy animals and some of them come also to hunt on the farm. So this that’s being reported was a clear business transaction of selling animals.”
There’s just one small problem with that explanation: foreign currency is not legal tender in SA. The country’s foreign exchange regulations published in terms of the Currency and Exchanges Act define foreign currency as any currency that is “not legal tender in the Republic, and includes any bill of exchange, letter of credit, money order, postal order, promissory note, traveller’s cheque or any other instrument for the payment of currency payable in a currency unit which is not legal tender in the Republic”.
Far more complex
Even the currencies of other members of the common monetary union — those of Namibia, Lesotho and Eswatini — are not legal tender in SA even though the rand can be used in those countries. The Reserve Bank has relied on regulation 6 of the exchange control regulations, which states that residents of SA who have become “entitled to sell or to procure the sale of any foreign currency” have 30 days to sell it to an authorised dealer (i.e. a bank). However, in practice the situation is far more complex.
First, had Ramaphosa become entitled to accept foreign currency as payment then surely he’d be able to produce proof he had such authorisation? And if the stolen money wasn’t in fact foreign currency then why not simply say so?
Even if Ramaphosa did have approval to receive payments in dollars there are numerous other requirements that would have had to have been met. While tourism-linked businesses can get permission to accept foreign currency as payment they must undertake to sell it to an authorised dealer the next business day. Records of the transactions must also be kept in case the Reserve Bank’s financial surveillance department comes knocking.
Exchange control regulation 6 also stipulates that foreign currency “shall not be sold, transferred or otherwise disposed of without the permission of the Treasury”. Regulation 8 states that “no person shall, except with the permission of the Treasury” make payments for imports or exports to enter into transactions “involving payments between persons in the Republic and persons outside the Republic” other than in currency prescribed by the Treasury.
Business Day approached three big name law firms (Bowmans, Werksmans and Cliffe Dekker Hofmeyr) to seek clarity on SA’s foreign exchange regulations but all three declined, even when offered assurance that discussions would be off the record. We then tried Ramaphosa’s new spokesperson, Vincent Magwenya, who incidentally started the job as news of the farm robbery broke, though he assured us this was pure coincidence.
Magwenya told Business Day the president cannot comment given that the matter has become the subject of investigations by the Hawks and public protector. Of course, no sooner had he uttered those words than Ramaphosa suspended public protector Busisiwe Mkhwebane. While he has ample reason to do so the timing of his action is already being used against him by his political enemies
Perhaps most curious is that the possible transgression of foreign exchange regulations is just the first layer of a very messy can of worms. Apart from potential tax implications and questions about why no formal police case appears to have been opened, there are also allegations of kidnapping and hush money reportedly paid to those said to be responsible for the farm burglary.
For once, SA is even more shocked than Ramaphosa.
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