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By Chulumanco Mahamba

Digital Night Supervisor

‘We hope this too shall pass’ – Ramaphosa on high cost of living in SA

President Cyril Ramaphosa addresses South Africa's economic challenges, the Reserve Bank's mandate, and ongoing commissions of inquiry.

President Cyril Ramaphosa told the National Assembly that he hopes and trusts that the standards of living for South Africans will improve in the future with lower inflation and higher levels of economic growth.

The president appeared virtually for a question and answer session where he was grilled on Thursday afternoon.

Among other things, Ramaphosa was asked about the mandate of the South African Reserve Bank, the commissions of inquiry he established, and combating violence against women and children.

Speaking on the mandate of the Reserve Bank, the president said that as inflation rises, the cost of living goes up.

“Most items cost more, and people are not able to afford many of the items that they usually buy. While the Reserve Bank should, without sacrificing price stability, take into account broader objectives such as employment creation and economic growth, there is currently no intention to review the mandate of the Reserve Bank,” he said.

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When asked if he would agree that the Reserve Bank should have economic growth, employment investment, and inflation targets, the president said the Reserve Bank’s approach is to curb inflation because higher inflation has a negative impact on the poor because the value of the currency also goes down.

“When inflation is at the level where it is now and interest rates are high, the balance goes out of kilter because it prevents investors from investing in our country. We hope and trust that this is just a momentary process, and this will pass, and we will see higher levels of growth, lower inflation, and therefore lower interest rates as we proceed forward.”

DA leader John Steenhuisen said the president should be concerned that the Reserve Bank is already compromised because of Ramaphosa’s “unfair exoneration” in the Phala Phala matter.

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“Has your exoneration on the Phala Phala matter not opened up a loophole for money launderers who can now stuff billions of dollars and pounds into couches as long as they never complete their transactions? And doesn’t this undermine the efforts of your government to get us off the greylist?” Steenhuisen asked.

In response, Ramaphosa said the Reserve Bank has always acted independently.

“It is one of the central banks that are highly respected in the world, and we need to continue to uphold the independence of the central bank,” he said.

Commissions of inquiry

Ramaphosa has established two commissions of inquiry since coming into office: the commission into tax, administration, and governance by Sars, established on 23 May 2018, and the commission of inquiry into allegations of impropriety at the PIC, established on 17 October 2018.

Ramaphosa said there were many lessons learned from the commissions he appointed as the reports had been tabled.

“Those reports are being analysed… and the various proposals and recommendations that were made by those two commissions are being turned either into regulations and legislation that will be put forward to Parliament for legislation,” he said.

Regarding the Zondo Commission, which implicated Dipuo Peters, Zizi Kodwa, and Gwede Mantashe, among others, the president said the recommendations are being processed and progress is being made in implementing recommendations. 

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“The law enforcement agencies are in the process of processing whatever actions can be taken against anyone who has been implicated in wrongdoing,” Ramaphosa said.

“I have said on many occasions that many charges have been prepared against a number of people who were involved in state capture. Many cases have appeared in our courts, and there has also been the process of following up on their assets through the asset’s forfeiture structure. All that is going ahead.”

The president added that progress takes time.

Fiscal discipline within government

On Wednesday, Finance Minister Enoch Godongwana tabled the medium-term budget policy statement, where he outlined government’s plan to stabilise public finances while maintaining support for the most vulnerable and protecting frontline services.

Steenhuisen, however, claimed that the minister took R50 million from the department of basic education, which was meant to be used to eradicate pit toilets at schools, to find higher salaries for deployed cadres.

“Like it has done many times before, your government has chosen cadres over the citizens. You’ve chosen to pay higher salaries by slashing frontline services, and you’re pushing us towards a debt crisis. Mr President, I ask a simple question: To fund the debt and to fund these cuts, will you raise taxes in the February budget for South Africans?” he asked.

In response, Ramaphosa asked Steenhuisen to be present when the minister tabled the budget. “Then he will hear whether that will happen or not,” the president said.

Violence against women and children

The president said violence against women and children is a deeply entrenched problem in the country, and it continues despite measures taken to combat it and political intervention.

“Cultural norms, patriarchal values, and toxic masculinity continue to perpetrate gender inequality and contribute to violence against women,” the president said.

“The laws that we have enacted have led to an increase in sentences for offenders. They have also led to tighter bail and parole conditions and provided greater protection to women at risk of domestic violence.”

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