Dawie Roodt slates Reserve Bank whitewash of Ramaphosa Phala Phala scandal

Renowned economist Dawie Roodt criticised the South African Reserve Bank’s (SARB) investigation into President Cyril Ramaphosa’s failure to disclose foreign currency as a whitewash.

The Reserve Bank’s Financial Surveillance Department investigated the $580,000 stolen from Ramaphosa’s Phala Phala farm in 2019.

The investigation included obtaining statements and affidavits from the people involved, including the President, employees of Ntaba Nyoni Estates, and Hazim Mustafa.

Mustafa allegedly paid $580,000 for 20 buffalo from Phala Phala, which was stored in a safe and later moved to a sofa on the farm. The money was then stolen from the farm.

The issue made headlines after Arthur Fraser, the former head of South Africa’s national spy agency, laid charges against Ramaphosa for allegedly trying to cover up the theft.

There was a public outcry about the large amount of money found at the President’s farm, which led to investigations into the matter.

Public Protector Kholeka Gcaleka cleared Ramaphosa of wrongdoing. She said there was no evidence that the President contravened the executive ethics code.

The SARB also cleared Ramaphosa, saying the President did not contravene exchange control regulations.

Reserve Bank Governor Lesetja Kganyago explained that conditions were attached to the sale transaction.

The Reserve Bank said Mustafa left the money as a security deposit. However, the sale could not be finalised because additional approvals were required.

“The foreign currency was stolen before the conditions precedent to the sale transaction could be fulfilled,” Kganyago said.

As the transaction was not concluded, a legal entitlement by Ntaba Nyoni Estates to the foreign currency was not triggered.

Accordingly, the Reserve Bank could not conclude that there was a contravention of exchange controls by Ntaba Nyoni Estates or the President.

Whitewash allegations

Dawie Roodt
Efficient Group chief economist Dawie Roodt

Dawie Roodt said when he considers the reasons the Reserve Bank gave for Ramaphosa not breaking the law, it is a whitewash.

“Either the President or somebody he employs broke the South African foreign exchange regulations requirements. There is no doubt about that,” Roodt said.

He said the technicality that the SARB used to exonerate Ramaphosa of any wrongdoing was nothing more than trying to explain it away.

Roodt said this decision by the Reserve Bank is detrimental because citizens need to have confidence in their central bank.

Any monetary system is based on trust. If this trust is eroded, it can put a country’s currency and the financial system at risk.

“If people lose confidence in their central bank, they will lose confidence in their currency as well,” Roody explained.

He said a central bank is supposed to be above politics. However, in the case of Ramaphosa and the Phala Phala money, it looks like the Reserve Bank was influenced by politics.

Roodt warned that it opens the door for other political decisions, like cutting interest rates before an election to benefit the ruling party.

“That is what I am concerned about and why I think the SA Reserve Bank made a huge mistake in the Ramaphosa report,” he said.

Call for action regarding the SARB ruling

ActionSA leader Herman Mashaba

The Reserve Bank was widely criticised by political parties, including the DA and ActionSA, which shared Roodt’s view that it was a whitewash.

The DA’s Dion George said the SARB lies at the heart of South Africa’s financial system, and they will fiercely defend its integrity and independence.

“We will not stand by while the reputation and integrity of yet another institution fails,” George said.

ActionSA leader Herman Mashaba said the SARB investigation is another attempt to cover up Ramaphosa’s involvement in the burglary.

ActionSA tried to gain access to the Reserve Bank report through a Promotion of Access to Information Act (PAIA) application – but failed.

Last week, the party revealed that the Reserve Bank failed to respond to its application within the mandated 30 days.

As PAIA requires, it will now file an internal appeal to ensure that the Reserve Bank gives them access to the report.

Mashaba said ActionSA wants to ensure that Ramaphosa is held accountable for his possible corrupt activities.

“The Reserve Bank’s report was most likely a whitewash as it was an attempt to protect the President,” he said.

“If there is nothing to hide, the SARB Governor, Lesetja Kganyago, would’ve honoured our PAIA application.”

Should their appeal ultimately be denied, they will approach the High Court seeking an order compelling the SARB to furnish them with the report.

“Once we have had sight of the report and if our suspicions are correct that the report is indeed a whitewash, we will take the report on judicial review,” Mashaba said.


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