31/07/2017 14:39 SAST | Updated 31/07/2017 14:39 SAST

Kganyago: Court Case Will Provide Clarity On Mandate

The Reserve Bank Governor also says there is no need to change the Bank's ownership structure.

Carlo Allegri / Reuters
Lesetja Kganyago, Governor of the Reserve Bank of South Africa, poses for a photo in the Manhattan borough of New York October 6, 2015. Kganyago said on Tuesday the economy, while weak, will not go into recession this year and that expectations inflation will rise above its target range in 2016 are unlikely to draw a monetary policy response. REUTERS/Carlo Allegri

The South African Reserve Bank (SARB) governor, Lesetja Kganyago says the upcoming court case where the Bank is challenging the Public Protector's CIEX report will provide much-needed clarity on the Bank's mandate, Business Day reported on Monday.

In June, Public Protector Busisiwe Mkhwebane released the report, which ordered Absa to pay back R1 billion from an apartheid-era loan, and also ordered that the Reserve Bank's mandate should be changed. Parliament and Absa have joined proceedings to challenge her report.

Mkhwebane said the Bank should promote sustainable economic growth while ensuring the well-being of citizens was protected. Currently, the Bank's constitutional mandate is to protect the value of the rand.

Speaking at an event on Friday, Kganyago reportedly said the developments around the report had opened up a discussion about the SARB's mandate. He said the bank's private shareholders had no say in how the Bank was run.

"Private shareholding represents an additional layer in the governance framework, to strengthen accountability and transparency," he reportedly said.

He said that even though Mkhwebane was no longer opposing the case against her, the Bank needed legal clarity on its mandate.

Meanwhile, Kganyago was hopeful about the country's economic prospects, and reportedly said growth is expected to have resumed in the second quarter of 2017, Eyewitness News reported. This follows two straight quarters of contraction which drove the economy into a recession.

"We believe that the worst is behind us and that growth in the second quarter of this year will be positive," he said.