By Sanette Viljoen
In the case South African Reserve Bank v Public Protector and Others (43769/17)  ZAGPPHC 443 the question was asked: What is the function of the central bank? The case concerned the urgent application brought by the South African Reserve Bank in order to set aside two recommendations by the Public Protector (PP).
The recommendations were made in a report compiled and made public by the PP on 9 July 2017. It contained, among others, a recommendation that the portfolio committee of Justice and Correctional Services go into recess to amend section 224 of the Constitution that concerns the Reserve Bank.
By virtue of the recommendation the PP’s instruction was that the Constitution be amended in order to amend the primary function of the Reserve Bank from: “the protection of the value of the South African monetary unit” to read: “the promotion of economic growth in the Republic”.
The application of the Reserve Bank centred largely around this recommendation, which requested that the entire purpose and function of the Reserve Bank be amended in the Constitution. The Reserve Bank led a considerable amount of expert testimony, which among others testified that worldwide it is the role of the central bank to protect the local monetary unit. Should this amendment have been allowed, it would have rendered the South African economy uncompetitive abroad and would have had many negative consequences for the country, for the Reserve Bank and especially for our monetary unit.
The court gave the matter due consideration and decided that the recommendation of the PP was illegal. She had acted illegally by conducting an investigation into the function of the Reserve Bank and making a recommendation to Parliament to have the Constitution amended. This is not her role and she may not/cannot do so. She had therefore overstepped her mandate.
The PP’s recommendation that the Constitution be amended so as to amend the Reserve Bank’s primary function falls entirely outside the powers of the PP by virtue of section 82 of the Constitution. The PP is bound by the powers afforded to her by the Constitution.
The PP’s recommendation to Parliament was therefore also set aside, with costs.