SA’s watchdog discussed cenbank mandate with Presidency: court papers

Public Protector Busisiwe Mkhwebane listens during a briefing at Parliament in Cape Town, South Africa October 19, 2016. REUTERS/Mike Hutchings

JOHANNESBURG  – South Africa’s anti-graft watchdog consulted the Presidency on a proposal to change the central bank’s mandate to promote economic growth rather than currency and price stability, the bank said in court papers submitted this week.

Public Protector Busisiwe Mkhwebane, whose job is to ensure proper conduct in public office, sparked a political row and a plunge in the value of the rand when she proposed changes to the central bank’s monetary policy mandate in June.

The court quashed her recommendations in August.

Mkhwebane made the proposal as she announced her findings that the apartheid government that ended in 1994 had breached the constitution by supplying Bankorp, which was bought by Absa in 1992, with a series of bailouts from 1985 to 1995.

Absa is now owned by Barclays Africa Group and Mkhwebane said Barclays Africa had to pay 1.1 billion rand ($85 million).

The issue of the bailout is still under review in court after Absa and the central bank challenged the findings.

It is unclear why Mkhwebane included the recommendations on monetary policy at the end of an investigation into Bankorp.

However, in a court affidavit filed on Monday the central bank said Mkhwebane meet with the Presidency and the State Security Agency before releasing her findings, local news service EWN said.

It also posted excerpts of the bank’s filings online.

Mkhwebane did not disclose her meeting with the Presidency on June 7 “to discuss the new remedial action in her final report”, the affidavit said, describing the her failure to do so as a “glaring omission”.

A Presidency spokesman was unavailable and the central bank declined immediate comment.

($1 = 12.8900 rand)

Reporting by Olivia Kumwenda-Mtambo; Editing by Ed Cropley

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