President Cyril Ramaphosa may have the right to apply his mind to issues, but he does not have the luxury of being caught napping — or shocked, as he used to say — when that issue spills over into the public domain. Or not to communicate clearly, especially on economic matters.
Unfortunately, the presidency’s handling of Reserve Bank deputy governor Kuben Naidoo’s resignation is not an outlier. The institution has a reputation for dragging things out unnecessarily. Clear and prompt communication by economic policymakers is key for a country that faces as many challenges as SA. But that hasn’t been a hallmark of Ramaphosa’s administration.
In the most recent example, the messages from the Treasury about what must be done about the state of the country’s finances were immediately contradicted by both the presidency and the governing party. As the IMF noted in a 2019 paper, “Frontiers of Economic Policy Communications”, communication is an “important policy tool”.
The presidency also failed to use this tool well in the case of the resignation of Naidoo, who is one of the three Reserve Bank deputy governors. The news of Naidoo’s resignation leaked on Monday, with the presidency spokesperson saying Naidoo had “expressed a desire to resign. However, the matter is still under consideration.” This choice of words is unfortunate for two reasons, and both relate to substance over form.
The presidency’s response suggests Naidoo has expressed a desire to resign but has not. This is a confusion of substance over form that could mislead the public into believing Naidoo has not resigned. Naidoo would have chosen his words to the president carefully to convey respect for the office, but that behaviour shouldn’t be confused with his intent.
The phrasing of the presidency response gives the impression that the president has powers to stop Naidoo from resigning. The reality is that if Naidoo wants to leave, he wants to leave. Of course, no matter how frustrated Naidoo may be with the length of time the president keeps his resignation under his pillow (so he can apply his mind to it), Naidoo cannot up and leave the Bank. He will have to wait for all the formalities to be completed. So, in that narrow sense the president can delay Naidoo’s departure, but that would just cause frustration all round.
The leaking of Naidoo’s resignation suggests there is frustration with how long the president has taken to apply his mind on the resignation. From which quarter that frustration is coming is a question for chief justice Raymond Zondo, the country’s preferred inquiry specialist.
Business Day reported on Tuesday that Naidoo informed Ramaphosa as early as July 4 that he planned to leave before the end of his term in March 2025. It’s now almost the end of October — four months later — and the president is still considering Naidoo’s early departure. There would have been logic to the timing of Naidoo’s approach to the president. And that logic would have had to do with a schedule he had in mind.
The media approached the Bank for comment, but its hands would have been tied because, as the late Jackson Mthembu reminded the nation during the state of the nation address debate in 2019, it is the president’s constitutional right and prerogative to appoint and “disappoint”. (He was talking about cabinet ministers and their deputies.)
But the president’s right and prerogative also apply to the Reserve Bank. The president appoints (but has no power to fire) the governor and the three deputies. And true to Mthembu’s words, the president has disappointed in his handling of Naidoo’s case.
Naidoo is a senior Reserve Bank official. His resignation matters, especially because he is leaving well before the end of his term of office.
A communications void, which is what the presidency has created, invites speculation, which is not good for the management of a country’s economy — of which the Bank is one of the key pillars.
The speculation in this regard has been about what Naidoo’s departure would mean for the balance of forces in the monetary policy committee, the body that decides monetary policy, since he has been considered a dove.
Speculation can cause harm, but what the media has gone for is so mild that it won’t cause any damage to the Bank’s reputation. But the point remains. A president of a country that’s bleeding economically can’t afford to pile issues under his pillow. He must find a more efficient way to apply his mind.
• Sikhakhane, a former spokesperson for the finance minister, National Treasury and SA Reserve Bank, is editor of The Conversation Africa. He writes in his personal capacity.
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