ONCE AGAIN, the “concerned” Governor of the Reserve Bank (SARB), Lesetja Kganyago, and his goons aka the “Monetary Policy Committee (MPC)” are the debt-drivers of this beautiful country. On the afternoon of 27 January 2022, four members of the MPC outvoted their fifth colleague and pushed for a 25 Basis Points Interest Hike in South Africa. SQAWK! That translates to a new prime lending rate of 7.5% per annum.
Enough was said already with regard to a healthy balance between concerns for future negative developments that may (or may not) lead to a higher inflation rate on the one side versus stimulating the local economy and leaving bond debtors breathing space, both to recover from a major knock down of the economy and the financial well-being of private households, all owed to a failed COVID-Reaction-Policy, on the other side.
The Ivory-Tower-Policy of SARB has been vetted and disapproved more times than could spot from the skies, but as it applies to all government sectors, ignorance is bliss and as long as the decision-makers are rolling in the taxpayers’ dough all is good!
What ignorance exactly? … well, let’s start with an unrevised, pathetic forecast of economic growth of only 1.7% for 2022 (financial experts even see the maximum growth at 0.8%). This was the exact forecast all along, meaning that further stimulus is needed to reach better forecasts, not another interest rate hike. Then we can look at the “threat of high inflation”: are you kidding me? Against all immediate threats and tendencies mentioned in the last two sittings of SARB/MPC the inflation rate outlook level for the next three (sic!) years remains at a level where a threat to the economy cannot be detected, i.e. between 4.5% and 4.9% and thereby well within the centre of the bandwidth set between 3% and 6%. This time the scapegoats are the December inflation rate of 5.9% and the intended electricity price hike by ESKOM of 20.5%.
The world below is still reeling from the consequences of … no silly, not COVID … but the brainless operational hectic that clueless uneducated wanna-be politicians forced down your throats in form of lockdowns, business closures, curfews, product bans (cigarettes, alcohol) and limitations of travels and movements. All countries that fell victim to the castration of their economies by the hand of ruthless and incompetent politicians are dealing with the same factors and challenges to get their businesses and finances back on their respective wings … sorry … feet. But why is it that South Africa has now twice hiked interest rates, while China lowered interest rates in January 2022 and countries across the globe, such as the USA, Canada, Indonesia, Pakistan, Turkey, Greece or Norway (just to name a few) that have sat already in 2022 decided NOT to hike interest rates? Does it have to do with a “special African context”? Most likely not, as only the former economic growth powerhouses Ghana, Kenya and Mozambique had meetings of their Central Banks in January and … SQAWK! … all three decided against an interest hike!
As stated in the very beginning: ONCE AGAIN fiscal incompetence had its say and remains unaccountable like the rest of your parasites that occupy important political offices, ignored, abused and plundered for their own well-being!