South Africa

Reserve Bank findings ‘cover up’ Ramaphosa wrongdoing

The South African Reserve Bank’s (SARB) findings on President Cyril Ramaphosa’s Phala Phala scandal can be seen as a “cover-up” as it lacks clarity and negates the public interest.

This is according to Firstsource Money executive director and head of research Redge Nkosi, who told Newzroom Afrika that the SARB’s handling of this matter is “quite frankly unacceptable”.

This comes after the SARB finalised its investigation and report into President Cyril Ramaphosa’s Phala Phala farm’s sale of buffalo for $580,000 and released its conclusion – but not the report – to the public.

The Reserve Bank found that the president did not contravene the Exchange Control Regulations but was not ‘legally entitled’ to this foreign currency transaction.

“On the facts available to it, the SARB finds that there was no perfected transaction and thus, the SARB cannot conclude that there was any contravention of the Exchange Control Regulations by Ntaba Nyoni Estates CC or, for that matter, by the President.”

“That is because the SARB has concluded that the transaction in question was subject to conditions precedent which were not fulfilled, and therefore there was no legal entitlement, within the meaning of Regulation (6)(1), on the part of Ntaba Nyoni Estates CC, to the foreign currency.” 

In other words, because Sudanese businessman Hazim Mustafa – who attempted to buy the buffalo from the president – never received delivery of the buffalo, there was no legal obligation on Ramaphosa or Ntaba Nyoni to have declared the foreign currency under exchange control regulations.

Nkosi said this conclusion is a way for the SARB to remove itself from this matter through a technicality.

He said the point of the Reserve Bank’s investigation should have been to scrutinise the transaction and the foreign currency the president did not declare.

“The point here is that a country has received foreign currency in the region of more than $580,000. According to the Spy bosses, it was about $4 million,” he said.

“That is sufficient ground to say that if the country received $4 million and has been in the country for more than a month, that should have been declared.”

“We do not have to wait for a consummation of the contract.”

Lesetja Kganyago
SARB Governor Lesetja Kganyago

A dangerous precedent

CANRAD director at Nelson Mandela University Professor Bheki Mngomezulu agreed with Nkosi.

“If the South African Reserve Bank says there was no contravention of any law because neither the company nor the president had access to the foreign currency, then the question is where did the money go?” Mngomezulu told SABC News.

“If it was Mr Mustafa who bought the buffalo, then who did he give the money to, and how did the money get into the country?” 

“There are a lot of questions, so the statements the SARB has made are confusing the nation more than we were confused before.”

In addition, Mngomezulu said that, in the long term, the SARB’s findings will harm the country.

He said it sets a dangerous precedent that large sums of foreign currency can enter and exit the country without being declared.

Mngomezulu said this matter would bring South Africa into disrepute and harm the country’s already fragile reputation.

This becomes particularly concerning considering the country’s financial greylisting earlier this year. 

“If people say this is good for the president, that is where the problem is. Because life does not revolve around the president. Life revolves around me and you as South Africans,” he said. 

“Presidents will come and go. The country will remain. If the image of the country is tainted, then it means the next time when we go and borrow money – which is one thing that we are good at – we will be considered a risk, and then, of course, our interest rate will be high.” 

“Will that benefit the country? My answer is in the negative. It definitely won’t benefit the country.”


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