Black Business council (BBC) believes the SA Reserve Bank Need to widen its mandate so it would focus on employment
The council said this, drawing concern over the increased rate of unemployment in the country.
SA Unemployment rate rose to 26.6% and according to the Trading Economics global macro models and analysts expectations, it is expected to be 26.40 percent by the end of this quarter.
To this, the BBC deputy president Sandile Zungu said the country’s economy need to be revived in such a way that it will give room for more job opportunities for citizens.
“Most developing countries in the world have used a multiplicity of instruments to drive a certain behaviour in the economy, and to a certain extent we are not seeing ourselves as outliers in terms of general thinking,” he said, pointing out that economic transformation is needed to give room for a greater participation by black people in the economy.”
Speaking on the sidelines of the council’s annual conference, Zungu said the Black Business Council had been at the centre of persuading ratings agencies to avert a downgrade.
“As an organisation we recognize the importance of these ratings agencies and it’s quite important that we pull in the same direction as everyone else in the country to not necessarily throw stones at the ratings agencies,” he said.
Similar to BBC’s call for an expansion of the Reserve Bank’s mandate, the Founder of the Centre for Economic Development and Transformation Duma Gqubule present at the conference, said the Reserve Bank had contributed to SA’s slow economic growth.
“Our downturn in the economy preceded the global financial crisis,
“The problem we have in SA right now is that we’ve had low growth of 1.6% for eight years … we can’t still be talking about the global financial crisis,” Gqubule said, pointing out that the reserve Bank should be “implicated” for causing the past three recessions.
Gqubule went further to question the credibility of ratings agencies saying its analysis was childish and infantile.
“I looked at the credit note on SA … I was shocked. It’s a five-page document … it is such childish and infantile analysis and I don’t think we should be listening to them,” Gqubule said.
Meanwhile, Businessday live reported that Moody’s Investors Service is keeping a close eye on political divisions ahead of a planned update of its rating on November 25.
Confirming this, the Council CEO Mohale Ralebitso said the council wanted SA to “enjoy good ratings”.
“They are not infallible by any measure but it does not mean that their inputs are not useful in terms of helping us out beyond what their particular ratings are.”
Ralebitso noted that ratings agencies help assess the country’s level of financial fitness and its ability at a systemic level to get the balance right between what it collected and what it spent, and any factors that influenced the sovereign credit rating,
“But the agency don’t have hegemony of what is good and wrong in particular to governing a country.” he added.