Kganyago was 'natural choice': BBC

Reserve Bank Governor Lesetja Kganyago
Reserve Bank Governor Lesetja Kganyago

Newly appointed SA Reserve Bank governor Lesetja Kganyago is the "natural choice" for the job, the Black Business Council (BBC) said on Tuesday.

"Mr Kganyago was a natural choice as he is credited with expert technical knowledge and is an astute leader, having distinguished himself at the National Treasury as director general for seven years, and recently as deputy governor of the Reserve Bank since 2011," BBC president Ndaba Ntsele said in a statement.

"The BBC strongly believes that Mr Kganyago is the right incumbent for the job given his experience as a leader, a public servant and accounting officer par excellence."

President Jacob Zuma announced Kganyago's appointment in Pretoria on Monday. Current governor Gill Marcus steps down on November 8.

Trade union Solidarity called on Kganyago to steer the SARB back to its mandate of maintaining price stability.

"Kganyago takes the SARB's reins in an environment where the upper band of the SARB's inflation target is breached and where South Africans are discouraged from saving and suffer continuous and significant erosion of their purchasing power, both internally and externally," it said in a statement.

"The union also expressed its wish that Kganyago would at long last scrap the obsolete exchange controls, which currently puts an unnecessary heavy administrative and financial burden on South Africans and South African businesses."

The union wished Kganyago well in his new job.

Earlier, the Congress of SA Trade Unions and its affiliate the Police and Prisons Civil Rights Union (Popcru), and the Black Management Forum (BMF) congratulated Kganyago on his appointment.

However, Cosatu said he had to change policy.

The policies of his predecessors had been the reason for the slow rate of economic growth, spokesman Patrick Craven said in a statement.

He said Kganyago should change the policy of seeing inflation as a threat and using it to justify high interest rates.

Rising inflation was a potential danger, but was less dangerous than unemployment, poverty, and inequality.

Craven said Kganyago had to insist that the SARB be nationalised, and should not be guided by ratings agencies, the World Bank, or the International Monetary Fund.

"The new governor's motto should be 'no more business as usual'," Craven said.

Popcru said it had faith that Kganyago's vast experience in the public service would benefit the SARB and the economy.

"Kganyago has shown exceptional leadership skills and broad knowledge of the country's financial landscape during his time as deputy governor," spokeswoman Theto Mahlakoana said in a statement.

The BMF said his appointment came at an opportune time when indicators showed the inflation rate was above the bank's three to six percent target band.

"Given Lesetja's grounding in Treasury till he joined the SARB and also his attuned leadership, he certainly has the prowess to deal with a sluggish economy that has only grown by 0.5 percent per capita."

The Economic Freedom Fighters, however, said Kganyago's appointment was an affirmation of "neo-liberalism" in the country.

"Kganyago has been part of the neo-liberal thinking that [has] constituted both the ANC government and the SARB for a while," it said in a statement.

"The idea of inflation targeting and reliance on foreign direct investment as central to macroeconomic planning have not provided anything for the poor."

It called him a "capable black person" who would do well as governor.

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