South Africa should “never be complacent” about protecting key institutions such as the central bank or National Treasury as it tries to boost economic growth, International Monetary Fund Managing Director Christine Lagarde said.

The rise of populism in developed economies has brought with it a wave of attacks on central banks in the US, UK, Europe and South Africa, where Governor Lesetja Kganyago successfully fought off a proposal by the nation’s anti-graft ombudsman to change the constitution to remove the Reserve Bank’s inflation-target mandate.

“A sound monetary policy that walks on its two legs is precious and needs to be secured; a good, solid Treasury that can’t be compromised is a precious institution that needs to be secured and protected,” Lagarde told reporters Wednesday in the capital, Pretoria. “I’m very hopeful that the strength of an institution like the central bank or the strengthening of the treasury are issues that are high on the agenda and that there is never complacency about it.”

STATE CAPTURE
Lagarde said she held “excellent talks” with President Cyril Ramaphosa, who is contending with gross domestic product that hasn’t expanded at more than 2% annually since 2013. He’s also made the fight against crime and corruption that has battered government-owned companies a top priority. A judicial inquiry is investigating so-called State capture, a local term for the use of political connections to secure appointment of allies to key state posts and win contracts.

“There is a lot of work to be done,” Lagarde said. “It is certainly the president’s endeavor to get to the bottom of it and to support this project of removing this state capture. I’m sure that there will be a lot of good coming out of it even though the process is painful but for the population of south Africa it is very much needed.”

Her time in Africa’s most industrialized economy follows an IMF staff visit, which found that public debt is reaching “uncomfortable levels.” The lender said South Africa should introduce a debt anchor in its budget to signal government’s commitment to reduce its obligations and help tighten fiscal policy.

Lagarde doesn’t see the need for IMF assistance for South Africa, she said in a separate interview with state broadcaster SABC News.

GROWTH DRIVERS
The October mid-term budget showed government debt will peak two years later, and higher, than previously forecast, the fiscal gap will widen further and state revenue will continue to undershoot. The country must rein in its spiraling credit costs to prevent debt exceeding 60 percent of gross domestic, which may force it to seek IMF assistance, Finance Minister Tito Mboweni said after the budget presentation.

The private sector has to drive investment, which will raise growth and create jobs, Lagarde said.

“There are no magic recipes: predictability, fiscal discipline, debt sustainability, a policy mix that will actually give to the investors an environment that will be conducive to their business is generally expected on their part,” she said.