In another twist involving the public protector’s office‚ the Minister of Co-operative Governance an.
The problem with economists is they don't understand business. And the problem with businessmen is they don't understand economics.
Economists will applaud yesterday's decision by the Reserve Bank governor Tito Mboweni to raise interest rates by half a percentage point.
South Africa's official inflation rate has moved past the government's 6percent limit, and economic orthodoxy says central banks can put the brakes on inflation by raising interest rates.
But to businessmen, central bankers are like the proverbial workman whose only tool is a hammer, and who treats every problem as if it were a nail.
The Reserve Bank can't make it rain, but it can curb inflation and believes interest rates are its only tool with which to do so.
Runaway food and oil prices are causing our inflation.
Raising interest rates won't fix that. Higher rates will only make everything more expensive - regardless of what economic theory says.
Farmers, already squeezed between the worst drought in 40 years and rocketing diesel prices, owe banks millions for land, tractors and harvesters.
They will now have to pay the banks more every month. And that means we in turn will have to pay more for bread, milk and meat.
Factory owners similarly will pass the higher cost of financing their machinery on to consumers.
Higher interest rates not only mean higher prices, but fewer jobs, something our country can ill afford given our widespread poverty.
Factories are running near capacity, and industrialists need to invest in expansion.
But they are now likely to put their plans on hold until interest rates come down again.
Unemployed people who might have got jobs if interest rates had remained steady have been sacrificed on the altar of macroeconomics.
By raising interest rates, something he does with boring regularity, Mboweni followed his economic textbooks by rote instead of thinking creatively - like a businessman.