Reserve Bank’s buffalo-sized Phala Phala cop-out puts President Ramaphosa in the clear

The SA Reserve Bank (Sarb) has found that because Sudanese businessman Hazim Mustafa did not take receipt of the animals he bought from President Cyril Ramaphosa, the head of state is cleared of holding and not declaring forex. In December 2019, Mustafa bought a range of game from Ramaphosa’s Phala Phala farm and paid $580-000, he confirmed. He didn’t ever arrange to have his haul fetched.

Some of the money was stolen from couches into which it had been sewn in February 2020. Ramaphosa’s head of VIP Protection, Wally Rhoode, then undertook an off-books investigation to find the culprits.  Former spy boss Arthur Fraser laid a criminal complaint in June 2020, which is still being investigated by the Hawks.

“On the facts available to it, the Sarb finds that there was no perfected transaction, and thus the Sarb cannot conclude there was any contravention of the Exchange Control Regulations,” the Central Bank said in a two-page statement on Monday, August 21. It also found that Ramaphosa was not entitled to the funds as “conditions precedent” to the transaction had not been met. All South Africans must declare forex to the Treasury within 30 days of receiving it.

“It’s a convenient and neat way of coming to a conclusion,” said lawyer Peter Leon of Herbert Smith Freehills. He says that the finding is likely to be taken on review. When asked if the Reserve Bank was more lenient on capital controls now than when South Africa’s forex regulations were inked in 1961, he said: “They are strict, onerous and pretty Messianic about enforcing them.”  (See relevant forex law in the graphic).



Leon says the term “no perfected transaction” meant Sars found the transaction was incomplete and that he was not entitled to the Phala Phala dollars. Therefore, he had not violated any forex regulations, it found.  

But in an interview with Annika Larsen, Mustafa acknowledged a sale. (See Victoria O’Regan’s report here) and said he still wanted his livestock.

“The public interest has been compromised by Sarb,” said analyst Khaya Sithole. “The onus is upon them to take citizens into their confidence.” The Bank only briefly summarised its finding and said it could not, by law, make the report public.  “They have created a knowledge vacuum.”

Ramaphosa was also cleared by the acting Public Protector, Kholeka Gcaleka, in July. In this article, Professor Pierre de Vos said she lacked curiosity about her finding.

Read more in Daily Maverick: Ramaphosa cleared of wrongdoing in Phala Phala scandal by Public Protector, Wally Rhoode now in firing line

The Sarb took a year to complete its two-phase investigation.  Ramaphosa was also cleared by the revenue service Sars which found in March that he had declared the income as tax. The President waived his right to confidentiality to allow Sars to make the report public. When asked if he would do the same for the Sarb report, the Presidency spokesperson Vincent Magwenya said: “The President did not choose to keep the report confidential: the Sarb made his decision based on the applicable legislation. The President has not had sight of the report and has no authority over it.”  

Fraser claimed $4-million had been stolen from the farm, but the most often quoted is between $580,000 to $600,000.  

 Daily Maverick put additional questions to the Sarb but the institution said it would not comment further. DM