The ANC is set to revive a decades-long discussion on the possible expansion of the mandate of the Reserve Bank at its national general council (NGC) in December.
The issue has historically divided the ANC, with some factions pushing for a more activist monetary policy while business and investors have warned tampering with the central bank’s mandate could undermine market confidence.
The NGC does not adopt policy or elect leaders, but is an opportunity for factions to test the waters before the elective conference in 2027.
It will be the first NGC held since former president Jacob Zuma was at the helm of the party before stepping down in 2018. It will also be the first NGC at which the ANC contends with losing its electoral majority for the first time.
The ANC began consultations within branches over the party’s policies this past weekend.
Whereas previous discussions over the Reserve Bank mandate have centred on it having a dual mandate such as the Federal Reserve, one that requires it to target both price stability and employment, this year the party has tasked its party members to discuss the role of the Bank with regards to development and transformation.
“As per the resolution of the ANC 55th national conference, maintaining the status of the SA Reserve Bank with respect to form, mandate and independence is important, but it must operate in a manner that supports transformation and development,” the base discussion document reads.
“This means monetary policy should be balanced with developmental objectives: while containing inflation, and it should also consider employment and growth. Similarly, the financial sector should be more accountable to development needs, for example by easing access to credit for small businesses and priority sectors.”
Despite the political pressure, Reserve Bank governor Lesetja Kganyago has previously maintained the Bank’s mandate is constitutionally secured and it will remain independent.
The discussion within the ANC takes place against the backdrop of an imminent announcement of the changing of the inflation target. Since 2000 SA has maintained a 3%‑6% inflation band, with the Bank implicitly focusing on the 4.5 % midpoint.
Since 1994 “the ANC committed to macroeconomic stability that supports inclusive growth and enables the acceleration of social and economic transformation. However, stability has too often been interpreted narrowly as fiscal consolidation and inflation targeting, resulting in austerity, budget cuts and underinvestment in productive sectors,” the ANC said.
Another discussion document focused on the economy reads: “The lower inflation combined with the recent cuts in the interest rate provided much-needed relief for the consumer in 2024. However, interest rate cuts remain slower than is required to support the economy especially given how long the SA economy has been within the inflation target range of 3%-6%.”
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