Explainer: Why Busisiwe Mkhwebane has got the CIEX report so wrong

NORTH WEST, SOUTH AFRICA – MARCH 23: Public Protector Advocate Busisiwe Mkhwebane during a stakeholder engagement at the Provincial Legislature on March 23, 27 in North West, South Africa. Mkhwebane is in a four-month roadshow where she introduces herself to stakeholders and spells out her vision for next seven years.

Public Protector’s swipe at Sarb could prompt further ratings downgrades

Busisiwe Mkhwebane is the gift that keeps on giving, yet nobody wants to receive.

Explainer: Why Busisiwe Mkhwebane has got the CIEX report so wrong

NORTH WEST, SOUTH AFRICA – MARCH 23: Public Protector Advocate Busisiwe Mkhwebane during a stakeholder engagement at the Provincial Legislature on March 23, 27 in North West, South Africa. Mkhwebane is in a four-month roadshow where she introduces herself to stakeholders and spells out her vision for next seven years.

In light of Public Protector Busisiwe Mkhwebane’s comments on Monday, where she recommended amendments to the constitution that would see our currency left unprotected; S&P Global has warned that, should her comments gain popularity, South Africa might face further downgrades.

Read: Rand nosedives after Mkhwebane suggests constitutional changes that would leave currency vulnerable

On Monday Mkhwebane’s findings on the 1992 Absa/Bankorp bailout came with the recommendation that the bank repays in excess of R1 billion, as well as an amendment of section 224 of the Constitution which deals with the South African Reserve bank (Sarb) and its mandate to protect the currency.

“We would consider it critical that the operational independence of the Reserve Bank remains untouched lest we would see weakening policy flexibility in monetary affairs,” S&P said on Tuesday.

“Depending on the severity of the changes (to SARB’s independence), a rating action could indeed be one consequence.”

Back in March S&P downgraded SA to junk status after Jacob Zuma’s sacking of finance minister Pravin Gordhan, and we can ill-afford another downgrade on account of some foolish politician’s short-sightedness.

Meanwhile, the Sarb has sought legal advice and could drag the Public Protector to court over her foolish comments and their repercussions and, according to Fin24, even the ANC stepped in with Gwede Mantashe saying Mkhwebane has overstepped in this instance.

Read: Mkhwebane could be dragged to court for comments ‘threatening independence of Reserve Bank’

“On the powers of the Reserve Bank and the Constitution, I think that’s Public Protector overreach. The Reserve Bank is right in reviewing it because that’s the only way you can challenge this, you can review properly,” Mantashe.