Pretoria – Changing the Reserve Bank’s mandate to support growth is not a viable solution and it should be nationalised instead, said the South African Federation of Trade Unions (Saftu).
Zwelinzima Vavi’s new federation released a statement following Public Protector Busisiwe Mkhwebane’s recommendation for a constitutional amendment to the South African Reserve Bank’s (SARB's) powers.
The Ciex report investigated the alleged failure of the Reserve Bank to recover R1.125bn in misappropriated funds that served as a lifeboat for Bankorp, now Absa.
Mkhwebane wants Absa to pay back the money. However, Absa is considering its legal options which include a high court review. The bank said in a statement that it had met the obligations of the loan from the SARB in October 1995. “It is our firm position that there is no obligation to pay anything to the SA government,” said Absa.
Saftu welcomed the Public Protector’s investigation into companies which “unduly benefited” during the apartheid era, but said this should not divert attention from urgent allegations around state capture.
Saftu acknowledged that Mkhwebane’s proposal for the SARB to promote “balanced and sustainable economic growth” while ensuring the protection of citizens' socio-economic wellbeing would improve matters. However, the federation called for the nationalisation of the bank, and for it to become a public service rather than a profit-making company.
Reserve Bank governor Lesetja Kganyago had previously said the SARB does not have a profit-making objective.
Earlier this year the SARB issued over 149 000 shares for purchase. Each shareholder is limited to holding 10 000 shares. Further shareholders have no say on policy decisions taken by the SARB in implementing its mandate. Shareholders can elect a maximum of seven non-executive directors of the board.
Since the release of the Public Protector’s report the Reserve Bank has consulted with its legal team, which has said the remedial action subscribed by Mkhwebane falls outside her powers and is unlawful.
“The remedial action proposed will have a negative impact on the independence of the Reserve Bank,” said the bank.The SARB has resolved to urgently review proceedings to have the remedial action set aside
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