ANC secretary-general Fikile Mbalula has launched a scathing attack on the government’s mishandling of the rand manipulation scandal.
This follows the admission by Standard Chartered Bank at the Competition Commission that it conspired with other South African and international banks to manipulate and devalue the local currency.
Mbalula said those fingering the ANC for being quiet were misdirecting their anger because the party had yet to get the full picture of what happened.
According to Mbalula, if Minister in the Presidency Khumbudzo Ntshavheni, who is the government spokesperson, and Finance Minister Enoch Godongwana could not give convincing explanations, it was unfair to expect the ANC to take a firm position on the matter.
Mbalula was speaking at the South African National Civic Organisation (Sanco) national conference in Durban this week.
He believes the government’s lack of effective communication on the saga has given rise to “a lot of conspiracies” that could have been easily avoided.
Even the National Treasury statement released this week was inadequateto convince Mbalula, who believes the political authority held by Godongwana should have explained the matter by now.
“First, we need to explain how this happened and what steps our government is taking. It cannot be that there are reports about the rand manipulation and the government is [responding] like an NGO,” Mbalula told the delegates at the Durban ICC.
“I heard government spokesperson Khumbudzo Ntshavheni, a comrade I respect, talking about the government being sabotaged, and she ends there. What are we supposed to say as the ANC if our government cannot give the marching line?”
Mbalula said the ANC would at some point probably organise a protest march on the matter, but not before President Cyril Ramaphosa’s government takes the lead and explains to Luthuli House what really happened.
But one thing is for sure, charged Mbalula, government ministers responsible for the finance cluster will be grilled at the next ANC NEC meeting for this year, scheduled for December 17–20.
Mbalula said Godongwana in particular was supposed to have been the chief spokesperson on the matter as a voice of authority, but he too was missing in action.
It has been reported that the minister is on sick leave.
“I have seen a statement from National Treasury, and Godongwana, with his nice hat, like he is going to horse racing, does not have his name in this statement.
“Godongwana has been nowhere to be found with such big revelations; we cannot be talking about rand’s manipulation, and I have never seen the minister of finance with his beautiful hat,” he said.
“And then people will point fingers at the ANC, saying we are leaderless. Godongwana must get his house in order and explain what happened with this rand manipulation because he is the only person who canexplain, not through a statement, and that is what we want as the governing party. Hence, we have deferred this matter to our government to deal with it and announce steps they are going to take.”
For days, the Treasury has cowered at the bank cartel implicated in rigging the country’s currency until on Thursday, when the department issued its first guarded statement.
While the Treasury said it viewed the matter in a serious light and highlighted regulations to ensure that banks do not engage in unfair practices or misconduct when setting reference rates, the initial nonchalant stance was cited, including internally, as an indication of how the government trembles and tiptoes around big business to avoid upsetting the dominant players with a monopolistic grip on the country’s economy.
“The Treasury should have issued a public statement at this point to ensure people know where we stand. Normally, we would have issued a statement by now but we didn’t,” a frustrated insider told Sunday World earlier this week amid loud silence from the custodian of public finances.
“It is possible for us to say that we understand that there are other legal processes ongoing, and we won’t say much about them. But we take this matter very seriously.”
The absence of ailing Godongwana during this period contributes to the leadership vacuum, according to the source.
Those holding a different view pointed out that the Competition Tribunal must still rule on the matter, so the Treasury could not jump the gun.
“Yes, Standard Chartered Bank has admitted currency manipulation and is willing to be a state witness. But the other banks say ‘no; we were not, and we want to take the Competition Commission head-on in court’.”
However, critics claim that future career prospects in the industry contributed to some Treasury officials’ reluctance to speak out strongly against banks’ illegal behaviour.
“These people are your future employers, and you do not want to ruffle their feathers. It is about self-preservation and personal ambitions.”
This is despite the fact that the financial services sector touches the lives of everyone in South Africa, critics noted, including that a robust and well-regulated financial sector is crucial for the growth and development of South Africa and its people because it facilitates the creation of jobs, the building of essential infrastructure, and the sustainable development of that economy.
“The government’s cowardice, fear and cold feet when confronted with mainstream business’s wrongdoings mark a damp squib for the 30-year-old democratic project, especially coming just months ahead of the general elections next year.”
A former high-ranking Treasury official said manipulating currency was a prosecutable offence, and “the directors of those banks at the time could be charged or declared delinquent”.
The person said currency depreciation can increase living costs by raising import prices, particularly affecting the poor, who typically spend a larger portion of their income on transport costs, and this can lead to increased taxi fares and clothing imports, which are then transferred to consumers.
Also, said the source, the poor are more vulnerable to inflation, as they may not have the financial flexibility to absorb rising prices. Inflation can erode their purchasing power, making it harder for them to afford necessities.
Economic instability can result in job losses and increased unemployment, especially for the poor.
Another factor was the lack of biting laws, which demonstrated that the banks and financial institutions enjoyed more influence on deciding regulations for the sector because of a lack of financial activism from the majority of citizens.
