Has the Reserve Bank abandoned its economic growth mandate?:
As we wait in anticipation for the outcomes of the third monetary policy committee (MPC) meeting of 2025 on 29 May, and inflation data reflecting a positive trend, will the South African Reserve Bank consider prioritising economic growth when pulling the rate ladder in 2025.
The Reserve Bank is often praised for its role in achieving price stability, but far less attention is given to its forgotten second mandate: supporting balanced and sustainable economic growth. In a country where unemployment remains stubbornly high at 32.1%, this secondary obligation demands renewed scrutiny.
Section 224 of the Constitution states the mandate of the central bank is to “protect the value of the currency in the interest of balanced and sustainable economic growth in the Republic”.
Although the Reserve Bank has largely been successful in protecting the value of the rand, it has been less so active in driving economic growth.
It continues to focus firmly on maintaining inflation within its 3% to 6% target band, even as broader economic conditions deteriorate. It operates a freely floating exchange rate regime, stepping in only to curb excessive volatility rather than to guide the rand toward any competitive level.
Although the MPC has begun to acknowledge the employment crisis more openly since the 2021 Amendment Bill discussions, there remains no formal commitment to targeting employment or the exchange rate directly. The Reserve Bank implemented several key amendments, particularly regarding exchange control regulations and financial stability. These included relaxing loop structure restrictions for South African tax residents, establishing the central bank as the resolution authority and introducing amendments to the Currency and Exchanges Manual.
The March 2025 Statement of the Monetary Policy Committee reflects a cautious
continuation of this approach. While the Reserve Bank acknowledges extreme global uncertainty, including weaker US growth prospects and volatile commodity markets, it maintained the policy rate unchanged at 7.5%. It also notes marginally lower inflation
forecasts for 2025 as a result of lower oil prices, although it warned that risks to the inflation outlook remain skewed to the upside.
Despite these more favourable inflation dynamics, growth for 2025 has been revised down slightly to 1.7%, with the risks to growth assessed as being firmly to the downside.
The MPC also explored external scenarios such as the potential loss of African Growth and Opportunity Act benefits and global trade disruptions. In its downside scenarios, the Reserve Bank recognised the potential effect of weaker exports, a depreciated rand, higher domestic inflation, and lower growth.
Despite acknowledging employment and growth risks, the focus of policy remained firmly on inflation expectations and maintaining cautious interest rate settings, with little reference to active support for employment outcomes.
The Reserve Bank maintains that unemployment is primarily structural, driven by energy insecurity, skill mismatches and rigid labour markets, and thus beyond the remit of monetary policy.
But such a stance overlooks how monetary decisions, particularly regarding the exchange rate and real interest rates, interact with these structural weaknesses. Rapid rand appreciation, often unrelated to productivity fundamentals, severely harms labour-intensive sectors such as mining and agriculture, while capital-intensive industries remain relatively insulated.
Productivity growth itself has become increasingly concentrated in a few capital-rich
industries, leaving low-skilled workers behind. The Reserve Bank almost certainly understands the rough boundaries of a competitive, employment-supportive exchange rate. Yet, without an explicit operational mandate to act, it remains limited to inflation forecasting and short-term currency stabilisation.
Even if it wanted to intervene more aggressively, South Africa’s foreign exchange reserves, standing at about $ 60 billion, would constrain any sustained effort.
A more realistic approach would be for the Reserve Bank to integrate employment outcomes more formally into its decision-making. Just as inflation forecasts anchor monetary policy today, labour market forecasts should be treated as essential inputs.
Greater coordination with fiscal authorities would allow for more nuanced responses, safeguarding vulnerable sectors without abandoning the Reserve Bank’s core inflation-targeting credibility.
Reviving the central bank’s economic growth mandate is not about compromising price stability. It is about recognising that lasting macroeconomic credibility depends on building an inclusive, resilient economy. In a country where exclusion is already dangerously entrenched, ignoring employment risks turns monetary policy into an exercise in managing symptoms rather than curing the underlying disease.
Cairo Mathebula is a political commentator. Her work primarily focuses on inter-African trade and economic policy. Neo Mosala is an analyst, writer, and Allan Gray Orbis Foundation fellow and is completing her master of management in finance and investment.
Africa is key to solving global crises, says B20 SA leader:
As the world grapples with economic uncertainty, supply chain disruptions, food insecurity, climate change and the urgent need for sustainable development, the role of Africa — both the private and public sectors — in shaping global solutions is critical.
This was the view of Anthony Costa, head of secretariat for B20 South Africa, based at Business Unity South Africa (Busa), under South Africa’s G20 presidency.
Costa spoke to the Mail & Guardian ahead of the Africa CEO Forum 2025 that kicks off in Abidjan on Monday, where President Cyril Ramaphosa is expected to speak at the opening ceremony.
Africa’s largest private sector meeting, themed “It’s time to strike a new deal: Can a new deal between state and private sector deliver the continent a winning hand?”, will bring together 2300 business leaders, investors, policymakers and professionals from around the world. The two-day event includes seminars, debates and high-level meetings aimed to highlight the role of the private sector in the development of the continent.
The B20 — the official business group of the G20 — is designed to amplify the voice of the private sector and develop policy recommendations for the world’s largest economies.
Costa previously worked in the Private Office of the Presidency leading the President’s Investment Mobilisation Programme, and participated in several initiatives between government and the private sector.
He will participate in a session along with South African leaders such as Minister of Minerals and Petroleum Resources Gwede Mantashe, Minister of Electricity and Energy Kgosientsho Ramokgopa , African Development Bank (AfDB) presidential candidate Swazi Tshabalala, Brand South Africa chief executive, Neville Matjie, the deputy minister of trade, industry and competition, Zuko Godlimpi, and RMB Corporate Client Group head Nana Phiri on Tuesday.
The session titled, “Unlocking the AfCFTA [African Continental Free Trade Area] dividend through regional value chains and public private partnerships” will showcase South Africa’s strategic efforts to strengthen regional value chains through infrastructure and industrial development, foster multi-stakeholder public-private partnerships and to leverage the country’s G20 and B20 presidencies to attract sustainable investment and drive inclusive growth.
As secretariat head, Costa coordinates a process that culminates in the B20 Summit, scheduled for 18 to 20 November in Johannesburg.
But the real work takes place ahead of summit, involving dozens of virtual and in-person meetings across eight task forces, each focused on a critical area for business policy. They are: finance and infrastructure, trade and investment, digital transformation, employment and education, integrity and compliance, energy mix and just transition, sustainable food systems and agriculture, industrial transformation and innovation.
Costa emphasised that the B20 was not just a South African or African process, but one rooted in the shared interests of the G20 nations.
With participants including the US Chamber of Commerce and multinational corporations, the B20 process provides a platform for global engagement — but one Costa believes must better represent African realities.
He said the US Chamber of Commerce remained committed to the B20 despite global jitters regarding President Donald Trump’s tariff wars. He said the tariff crisis had led to businesses realising the inherent risk in relying on a single supply chain and that diversification is vital.
“We’ve created a task force specifically focused on industrial transformation and innovation, because we believe there’s an opportunity to redefine what manufacturing and economic growth can look like in the 21st century — not just metal and machinery, but advanced, diversified, sustainable systems,” he said.
Key to industrial development is moving beyond extraction toward beneficiation, where raw materials are processed and value is added locally.
“We’ve been talking about beneficiation for 25 years, but now we have a real opportunity,” Costa said.
“Critical minerals are central to the global energy transition, and Africa holds many of them. But we can’t beneficiate everything in every country — we need smart policies that make economic sense, and intra-African trade is key to that.”
According to the UN Trade and Development, intra-African trade remains low — at about 16% of total African trade — but integration efforts such at AfCFTA, aim to improve this.
“Look at the European Union — it took decades but it shows what’s possible. We’re still in the early days. We need governments to adopt policies that are not protectionist, but are in support of local production, and to do so when it’s economically sensible, you can’t finish everything in every country, but it’s about finding the right balance” he said.
“Probably the game changer is intra-African trade, because it makes a much stronger economic case to produce on the continent, if your market is here.”
Costa’s vision for growth is also focused on the role of public-private partnerships (PPPs).
He said that for infrastructure, energy and innovation, the partnership between government and business is non-negotiable, and South Africa has some successes in this area.
“The sector is key to economic growth but it can’t succeed in isolation. Government needs to provide for investment, in many cases, in public infrastructure. It’s not a purely private endeavour by definition, and so you need to have frameworks and mechanisms that enable private investment.”
He pointed to South Africa’s Renewable Energy Independent Power Producer Procurement Programme as a success story.
“It was expensive at first, but it allowed investment in solar and wind and we’ve seen prices come down dramatically, and added clean energy to the grid that we otherwise would not have anticipated. That’s a successful PPP.
“I think we’ve struggled to really make progress on other public private partnerships in South Africa, and so the national treasury is particularly working on creating a new framework to try and make it easier. The big opportunity is investment in grid transmission and a lot of work is taking place,” he said.
Other success stories include investment by the South African National Roads Agency in toll roads such as the N3 and N1 and more recent cooperation between government and business in tackling the country’s energy and logistics crises.
As Costa heads to the November summit the challenges facing Africa and the global economy are many and dire: geopolitical instability, climate change, rising trade barriers and slowing growth.
But Costa remains optimistic that the B20 process can help forge a new path. To do so business must continue investing, growing productivity and supporting development — especially in areas like food security.
“We recognise that global food systems are under pressure from productivity and a climate perspective, as well as from a trade perspective — the international trading system is fragmented, there is a rise of tariff barriers. Business needs to find ways to continue to invest to become more productive.”
Costa said the Africa CEO Forum was an important event, because it gave the country the opportunity to engage with the continent’s business leaders and policymakers.
“Traditionally, South African business hasn’t necessarily participated in Francophone Africa to the same extent it has in Anglophone Africa, but in recent years we have seen more engagement and this is a great opportunity.”
He said this isn’t just about South Africa; it’s about ensuring African businesses and voices are part of shaping global policy — from trade to technology to development.
With less than seven months until the Johannesburg Summit, the pressure is on — but so is the potential.
“We aim to produce recommendations by mid-year so that they can be shared and debated widely before the November Summit. The final outputs are made public to allow for policy engagement — not just with G20 governments, but with business associations, the World Trade Organisations and others,” he said.
“I think we see South Africa’s G20 presidency, and with it both the B20 and the other engagement groups, as an opportunity for us to really put forward, to curate a process that allows issues relevant to Africa and the developing world to be heard, but it also speaks to markets across the G20 to receive feedback and attention, and to do so in a way that we create a legacy and have an impact,” he said.
“We do not have a lot of time left in seven months from the end of November … we will have to think: what have we done from a global perspective? What is the legacy we’ve created as South Africa?”
The African CEO Forum was founded by Jeune Afrique Media Group in 2012 and is now permanently co-hosted by the International Finance Corporation of the World Bank.
New world of work requires new minds:
It’s Graduation Season again. This is one of the highlights on the academic calendar, when institutions showcase the scholarly achievements of their graduates. In the life of a student, this moment is a rite of passage to transition from “gown to town”; from tertiary institution to the world of work.
For many graduates, the euphoria will unfortunately be short-lived. After all their sacrifices, struggles with funding and accommodation, as well as the challenges that come with higher education, they will now face the cold, harsh reality of the marketplace. Here different rules and norms apply. It’s complex, rapidly changing and highly competitive. Few graduates are prepared for this, which exacerbates the already serious youth unemployment crisis in the country.
“The world doesn’t care about what you know. The world only cares about what you can do with what you know and it doesn’t care about how you learnt it.” This quote by New York Times columnist, Thomas Friedman, should be a wake-up call to graduates and higher education faculty alike. After 12 years of secondary schooling and about four years of tertiary education, key questions must be addressed. What are graduates capable of doing with their learning? What problems can they solve? What value do they bring to society?
The marketplace thrives on entrepreneurialism, innovation, critical thinking, decisiveness and problem-solving abilities. But, at most tertiary institutions teaching is still done in passive, old-fashioned, teacher-centred, and discipline specific ways. Rote learning is common and there is little emphasis on innovation or entrepreneurial thinking. This affects employability and therefore it’s not surprising that unemployment among graduates is on the rise.
The Statistics South Africa’s Quarterly Labour Force Survey for the last quarter of 2024 showed no substantive change in employment levels. Youth aged 15 to 24 and 25 to 34 continue to have the highest unemployment rates at 59.6% and 39.4% respectively. Even though the graduate unemployment rate decreased by 1.1 percentage points from 9.8% in Q3:2024 to 8.7% in Q4:2024 these are still unacceptably high numbers of unemployed graduates.
What’s even worse is for job-seekers with just a matric school leaving certificate. They are even more vulnerable with unemployment rates of about 38.2%, while the NEETS (not in employment, education or training) aged 18 to 34 are up from 8.6 million to 8.8 million compared to the same quarter in 2023.
High youth unemployment casts a blight on the country’s prospects, because we are not preparing the human resources that the country will need in the future both from skills capacity or in terms of growing a tax base to fund future development needs.
Education is costly in time, labour and infrastructure and places a significant burden on the public purse. So when graduates and youth struggle to find employment it should ring alarm bells and prompt urgent, decisive action from all stakeholders — government, education institutions, learners, corporates, parents.
New minds — new thinking and new ways of doing must be prioritised. This is not only to access employment, but to keep pace with the rapid developments in technology, work processes and sustainability issues such as climate change. Hence educators at all levels need to critically evaluate what they teach, how they teach and, more importantly, how their content aligns with the needs of the modern world.
From its Latin roots, education derives from “educare” which means “to bring up” or to “nourish”. So activities in the class and lecture rooms must nurture and harness the natural creative talents latent in each human being and complement these with academic and technical knowledge. It was the late Albert Einstein, not only a brilliant physicist but also an astute social commentator who once defined education as, “what remains, once we have forgotten everything we learned at school”. Einstein understood the essence of education — education that transcends rote and book learning; education that presents its value in what we’re able to do to create a better world.
Even though human development is systemic, education should be at the forefront because of the time and resources invested in it. Therefore didactics and epistemology should be updated to align more closely with industry trends and innovations. The explosion of smart technology in the 21st century and its rapid evolution is having a huge effect on the world, economically and developmentally. This shows a clear need for urgent investment and development of skills conducive to a knowledge-based economy.
Although there has been significant promotion of the STEM (science, technology, engineering and maths) subjects, what needs to be reviewed is when and how these are taught. The logic and rigor of these subjects must be instilled much earlier in a child’s life and often through activity-based learning rather than boring theory. After all, Scaled Composites (kit aeroplanes), Square (online payment digital platform), Dry Wash (waterless cleaning gel) and BrickArms (Lego accessory maker) were all started by individuals in their own capacities and driven by their own needs.
Today the Maker Movement is a global community of doers where some garage projects from hobbies and interests have transitioned to businesses and scaled to become multi-billion dollar enterprises. Open source design software, 3D printing, funding from venture funders like Kickstarter and online markets like Etsy, have democratised manufacturing and brought enterprise into the home where anyone with determination can access it.
Therefore learning should be less theoretical and more applied. Laboratories and workshops can rapidly be transformed to become “maker spaces”.
“Purpose-driven engineering” at the University of KwaZulu-Natal is one such example. Civil engineering students are encouraged to apply their learning to solve problems in their communities and, by doing so, nurture applied learning, problem-solving as well as task management skills. These will serve them well in their future jobs as professional engineers.
To shape a truly transformative and meaningful educational experience requires intentional engagement informed by social and professional objectives. Teaching and learning should be vibrant, expansive and aligned to the latest social, economic, political and environmental developments. It shouldn’t be limited to the textbook. It requires a dynamic transactional partnership with industry and broader society. This will stimulate curiosity, initiative and accountability.
When we look into the eyes of our graduates, we need to see a future in the making; one of hope. We need to see the confidence in young minds who are capable and willing to tackle the big challenges to build a more sustainable future for themselves.
Dr Rudi Kimmie is the interim director of the Aerotropolis Institute Africa (UKZN). He writes in his personal capacity.
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