SARB report needed to clarify president’s exoneration

Issued by Dr Dion George MP – DA Shadow Minister of Finance
21 Aug 2023 in News

Note to editors: Please find attached soundbite by Dr Dion George MP.

The DA notes the South African Reserve Bank’s (SARB) announcement that it has finalised its year-long investigation into the “Phala-Phala” matter. The findings of the investigation effectively exonerate President Ramaphosa of any ‘technical wrongdoing’ within the scope of its inquiry.

The investigation stems from allegations by Arthur Fraser, the former head of the South Africa’s spy agency, regarding the theft of at least $580,000 (R10.7m) of undeclared foreign cash from the President’s private game farm.

The Reserve Bank’s states that it “cannot conclude” that Ntaba Nyoni Estates or President Ramaphosa violated foreign-exchange control laws. The Bank has chosen not to release the full “private internal” report. This statement by the Reserve Bank does raise questions about transparency and accountability.

The Reserve Bank’s finding hinges on the absence of a “perfected transaction,” which means that the legal prerequisites for the transaction to be completed were not met. Specifically, the conditions for a perfected transaction were unfulfilled due to the non-delivery of a buffalo to the infamous businessman Hazim Mustafa. This led to the Reserve Bank’s conclusion that there was no legal obligation under the exchange control regulations of 1961 to declare the foreign currency.

However, the suspicious circumstance of the money being stuffed into the President’s couch, and the possibility that cash was held beyond a legislated limit, seem to have been beyond the scope of the Reserve Bank’s investigation. The narrow focus of its investigation also raises concerns about its thoroughness and whether any political considerations arose.

As the regulator of currency within and across our borders the integrity and independence of the Reserve Bank is paramount. It is vital for our democracy and the financial stability of South Africa, especially considering our recent greylisting by FATF, that the Reserve Bank conducts its investigations with the utmost care and without any fear, favour or prejudice.

The DA will not let this matter rest. We will be posing additional questions to the SARB when they appear before the Standing Committee on Finance on the 30th of August, and we will be writing to the Governor of the Reserve Bank to request further details and a copy of the report.

South Africans need to know what actually happened at Phala-Phala and that includes knowing whether the President broke any financial law he is entrusted to uphold.