South Africa

Former SA Reserve Bank economist warns of cover-up

Former Reserve Bank economist Dawie Roodt said the central bank’s investigation into President Cyril Ramaphosa’s Phala Phala is a cover-up and wrong.

Earlier this week, the South African Reserve Bank (SARB) announced that it had finalised its investigation and report into the Phala Phala matter.

The Reserve Bank said that on the facts available to it, it found that there was no perfected transaction.

The SARB said it could, therefore, not conclude that there was any contravention of the Exchange Control Regulations by Ntaba Nyoni Estates or by the President. 

“That is because the SARB has concluded that the transaction in question was subject to conditions precedent which were not fulfilled,” it said.

“Therefore, there was no legal entitlement, within the meaning of Regulation, on the part of Ntaba Nyoni Estates to the foreign currency.”

Roodt said the Reserve Bank made a big mistake in this finding. “It is a cover-up, and it is wrong,” he said.

Roodt is traditionally a strong defender of the Reserve Bank and has often praised SARB Governor Lesetja Kganyago for his excellent work.

As an award-winning economist and former Reserve Bank employee, he is well-positioned to comment on this matter.

He explained that somebody owned $850,000 in South Africa, contravening the country’s foreign exchange regulations.

The Reserve Bank said it was not Ramaphosa, which means somebody else contravened the regulations.

“My feeling is that it was the President. Although he was allegedly not the owner of the money, he or his company was in possession of the money.”

“Somebody was in possession of the money, which is illegal in South Africa. You are not allowed to be in possession of foreign currency unless you jump through hoops.”

Political backlash

DA’s shadow minister of finance, Dion George
DA shadow minister of finance, Dion George

The ruling ANC welcomed the Reserve Bank report, saying the determination that President Cyril Ramaphosa did not violate any Exchange Control Regulations is unambiguous and definitive.

“The African National Congress expresses its satisfaction with this conclusion and anticipates that all baseless accusations will be dispelled,” it said.

However, other political parties and civil groups share Roodt’s view that the Reserve Bank report is a cover-up to defend the President.

The DA’s shadow minister of finance, Dion George, said the SARB’s media statement is silent on the fact that foreign currency was in the President’s possession.

“That is the crux of the matter, not whether the transaction was perfected. The transaction’s status cannot be the determinant, it is the possession of the currency,” he said.

He added that if the transaction status is considered the deciding factor, the door is wide open to money laundering and foreign currency.

ActionSA contended that the Reserve Bank report is most likely a whitewash and filed an application in terms of the Promotion of Access to Information Act (PAIA) to access the report.

“If there is nothing to hide, the SARB Governor, Lesetja Kganyago, must honour our application in terms of PAIA.” Action SA said.

Freedom Front Plus leader Pieter Groenewald said the Reserve Bank’s findings raise more questions than they provide answers about the matter.

“The Reserve Bank said no evidence could be found of a transaction involving the sale of buffalo and, consequently, no exchange control regulations were contravened,” he said.

“This surely serves as proof that the foreign currency ended up on the farm in some illicit manner.”

Groenewald said the President owes the South African public an explanation. “If he keeps refusing to play open cards, Parliament must take steps to thoroughly investigate the matter.”


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