Page 142 - SARB: 100-Year Journey

Political change and the SARB, 1989: a move towards autonomy
The prevailing political environment in the 1980s had given rise to the foreign debt crisis, runaway inflation, high unemployment and social unrest. The apartheid experiment of 1948 was unravelling, under pressure from within and without, and political reform became an inevitability. A democratic state of affairs was no longer a question of ‘if’, but ‘when’. President P W Botha’s hard-line stance had landed South Africa in an economic position that was self-evidently unsustainable.
Those socio-economic conditions contributed significantly to a softening in political attitudes, and the soon-to-come codification, through statute, of the independence of the SARB, a process that began in 1989.
Botha’s fate was effectively sealed by the events of 1985−86, but he clung to power. However, in January 1989, Botha suffered a stroke. He relinquished his position as leader of the National Party, the chief political sponsor of apartheid. But he remained State President. In August 1989, Botha’s colleagues in the National Party called time on his stint as State President.
True to form, Botha used his last televised address as head of state to rail against the reformist tide that was sweeping through his party and the country. F W de Klerk succeeded Botha. De Klerk’s appointment signalled the beginning of the end to South Africa’s formalised policy of racial and ethnic demarcation.
The winds of change were blowing, too, at the SARB in 1989. A new Governor and a reworked SARB Act were two key developments for the central bank.
In August of the same year, Dr Chris Stals was appointed Governor of the SARB. This happened shortly before Botha formally stepped down, and two months after the SARB Act of 1989 was promulgated in June that year. The 1989 Act replaced the SARB Act of 1944. Business Day (1989) called the revised SARB Act the Bank’s “freedom charter”, underscoring its significance.
In 2020, Stals graciously availed himself to reflect and talk about his 44-year career at the institution, where he started working as a young university student in 1955. In that wide- ranging interview, the former SARB Governor was frank about the troubles of the times, especially with reference to how the Bank was affected. He highlighted the highs, but did not shy away from the lows.
Dr Ernie van der Merwe, Prof. Jannie Rossouw and James Cross did the same in giving their perspectives about this period.
On institutional autonomy, Stals remembered well that “[when] I was appointed as Governor in August 1989 the Reserve Bank was not as independent, in my view, as it should have been. At the time, for example, we had money supply targets, which were changed from year to year where necessary. My predecessor, Gerhard de Kock, introduced a practice of discussing these money supply targets with the Cabinet. The Reserve Bank had to submit its annual targets for the money supply to the Cabinet.”
President F W de Klerk (left) with SARB Governor Dr Chris Stals. /SARB
132