South Africa’s Ruling Party Sows Confusion Over Central Bank Stance

(Bloomberg) -- The battle over South African economic policy within the ruling African National Congress was laid bare on Thursday.

The party first released a statement, issued by the communications team headed by spokesman Pule Mabe, effectively calling for the central bank to cut interest rates. That was soon retracted, with the head of the economic transformation committee, Enoch Godongwana, espousing the independence of the institution. Mabe has backed former leader Jacob Zuma, while Godongwana has long been seen as being in President Cyril Ramaphosa’s camp.

South Africa’s Ruling Party Sows Confusion Over Central Bank Stance

While Ramaphosa ousted Zuma as national president in February, he’s struggled to assert authority over factions loyal to the ex-leader. That’s hampered efforts to revamp an economy that has slipped into recession. The conflicting statements came even as the government announced new measures to boost growth on Friday and weeks after Johannesburg’s Sunday Times newspaper reported that senior party officials were plotting with Zuma to remove Ramaphosa.

The ANC “implores the committee members to prioritize the plight of poor South Africans,” it said in a statement before the South African Reserve Bank’s Monetary Policy Committee announced its decision to keep its key interest rate unchanged on Thursday. “The ANC believes that monetary policy is a critical legislative instrument in driving growth, creation of jobs and reduction of the capital costs in the economy.”

Godongwana followed up.

The earlier statement “was unfortunately issued without the requisite consultations,” the ANC said in a statement issued by Godongwana. “The ANC respects the independence of the SARB.”

Ramaphosa has clamped down on corruption that marred Zuma’s nine years in charge and has championed orthodox economic policies since becoming president.

“The divided nature of the ANC is by now obvious and there for everyone to see,” said Tinyiko Makulele, a political analyst at the University of Pretoria. “This particular issue of the statement regarding interest rate cuts, in my view, has more to do with lobbying and disagreement about the proposal to curtail the powers of the Reserve Bank.”

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