IFP MEDIA STATEMENT BY: 
MR NAREND SINGH MP
IFP FINANCE SPOKESPERSON

9th April 2008

The Inkatha Freedom Party is calling on the Reserve Bank Governor Tito Mboweni to leave interest rates unchanged when the Monetary Policy Committee announces its decision later this week. 

The IFP believes that another increase would cause further undue hardship on cash-strapped South Africans, particularly in the lower and middle income groups. 

We agree that stability and predictability is needed in the SA economy, and whilst the IFP believes in inflation targeting, the current 3-6% band is not appropriate if the current unstable economic environment is taken into consideration. 

Rising international food price, rising oil prices, the volatile Rand, the proposed 53% hike in electricity fees by Eskom and local government's statutory increases have contributed to the volatility of our economy. 

The IFP believes that consumers are being made to pay for the sins of others.

We are concerned by reports that Swaziland's fuel is cheaper than ours, while Eskom seems hell-bent on bullying the SA consumer with charging them more per kilowatt than what they charge our neighbouring countries. 

South African consumers have been, to a large extent, prudent in their spending. Consumer spending has cooled sharply due to government's tighter squeeze on credit through the credit act which is now evident in the low number of vehicle sales. 

We believe that it might be time for government to review the 3-6% inflation band and adjust it upward. When our economic situation stabilises we can always revisit the band and adjust it downward if needed.

Lastly, the IFP believes that government should look for other instruments in the fight to keep consumer spending down. Deposits on goods such as furniture, appliances or cars could be one way of curtailing consumer spending. This will be a better approach than simply raising the interest rates again and thus further punishing struggling South Africans.