President Cyril Ramaphosa’s mishandling of the $580,000 given to him by Sudanese businessman Hazim Mustafa, ostensibly to pay for some buffaloes from his Phala Phala farm, has had repercussions for the Reserve Bank.
After a year-long investigation, the Bank has concluded that the president did not contravene any foreign exchange control regulations — despite everyone knowing that he failed to declare the funds within 30 days, as required by law.
In a statement heavy on legalese but light on substance, the Bank announced that because the transaction between Ramaphosa and Mustafa had not been “perfected” (completed), since certain “conditions precedent” were never met (the buffaloes never changed hands), this meant that neither Ramaphosa nor his farm was legally entitled to the dollars. As such, the Bank could not conclude that there was any exchange control breach since the law requires only people who are entitled to foreign currency from a sale to declare it within 30 days.
While the Bank’s narrow findings are clever and no doubt legally sound, they are also extremely convenient for Ramaphosa. You have to wonder whether the public interest has truly been served. Certainly, the independent panel appointed by National Assembly speaker Nosiviwe Mapisa-Nqakula to probe the issue found the president “has a case to answer”. Predictably, the ANC used its majority in parliament to ensure the matter was dropped.
Acting public protector Kholeka Gcaleka later cleared Ramaphosa of a breach of executive ethics over the issue in another narrowly crafted investigation. She scapegoated the president’s head of security — a move that was again extremely convenient for the president, and which drew wide criticism.
It is worth recalling that Mustafa conceded he did not declare the funds when he entered the country. At the very least, Ramaphosa should have ascertained this before he incurred the reputational risk of accepting the money. As to hiding the dollars in his couch instead of holding them in a customer foreign currency account like any other exporter — well, the mind just boggles.
The public isn’t stupid. You don’t need a law degree to know that the president does indeed have a case to answer. Unfortunately, in the public’s eyes, parliament, the public protector and now the Bank all appear complicit in one giant cover-up. And given the ANC government’s appalling track record in holding its leaders to account, who can blame South Africans?
The Bank, as an institution that fiercely guards its independence and credibility, will blanch at such a suggestion. Governor Lesetja Kganyago is not one to shy away from difficult decisions or to court popularity from any quarter, especially the politically powerful. However, because of this, and the fact that it is one of South Africa’s few remaining public centres of excellence, the Bank is used to being treated with reverence by the establishment.
Its monetary policy decisions are never robustly criticised by the mainstream media or private economists even when they disagree, as in other more mature democracies. It’s also been a long time since anyone asked why monetary policy committee (MPC) minutes aren’t published, or why external MPC members aren’t appointed to aid transparency, or why MPC membership hasn’t been extended from five people to the maximum of seven allowed.
Perhaps this is because there is a tacit understanding that the Bank under Kganyago resides on the side of the angels, and so nothing unnecessary must be done to add to the political pressure it labours under. But that is even more reason why the Bank has done itself a disservice in issuing a performative determination on the Phala Phala matter. The Bank has always stood proudly above the quagmire of politics — until now. We expected more.
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