ANC sticks to policy decision to nationalise SARB

The old South African Reserve Bank, with counters for customers. It is now the home of the Finance ministry. (Photo: Matthew le Cordeur)
The old South African Reserve Bank, with counters for customers. It is now the home of the Finance ministry. (Photo: Matthew le Cordeur)

Johannesburg – The ANC has resolved that the South African Reserve Bank (SARB) should be nationalised and the existing structure of private shareholders within the central bank should be done away with.

The Economic Transformation Committee briefed the media on Wednesday night about the policies it had adopted.

In June/July, the 5th ANC policy conference resolved that the SARB should be nationalised and the central bank should have greater interaction with the Minister of Finance.

Reserve Bank Governor Lesetja Kganyago said at the time that the shareholders receive nominal returns and have no say over monetary policy.

Kganyago also cautioned that it will be costly for the state to buy out individual shareholders.

Two weeks before the ANC policy conference resolved to have a fully state owned central bank, the Public Protector, Busiswe Mkhwebane, recommended that the SARB's mandate be changed to focus on economic growth, instead of price stability.

She was forced to admit in August that she didn’t have the powers to recommend constitutional changes after the SARB applied for an urgent interdict against her.

Chairperson of the ANC’s Economic Transformation Committee Enoch Godgonwana didn’t give a timeline for this policy change to come into effect.

“We will not change the mandate of the Reserve Bank,” he assured. 

Godongwana also announced that the ANC has resolved to amend the Constitution to achieve land expropriation without compensation.

He labelled it a “contentious issue” and said that the resolution has a condition that it be enforced sustainably.

Political analyst Daniel Silke told Fin24 that the issues of both land expropriation and the nationalisation of the Reserve Bank are an attempt to manage the “deep political divisions and polarisation” that exist in the ANC currently.

"Ideology certainly is again trumping practicality when it comes to some of these suggestions, but it is ultimately exactly the kind of messiness that we should be avoiding as a country."

The rand remained stable amid the announcements and by 22:10 the local unit was traded at R12.72 against the greenback. In the minutes leading to and at the announcement of the ANC presidential winner, the rand hit a 9-month high of R12.55, before retreating to around current levels.

Previously Kganyago said that nationalising the Reserve Bank won’t change anything as shareholders do not have control on policies.

The SARB also issued an explanatory statement following the policy conference where the draft resolution was made available.

“The shareholding of the SARB has no bearing on the policy or regulatory role that the SARB plays," the statement read.

“Any notion that a change in the shareholding of the SARB will amount to a higher degree of control over the SARB is incorrect.”

Even if the shareholding had to change, the SARB’s mandate is still determined by the Constitution. “A mandate it must carry without bowing to any pressure, whether it be political or from the private sector.”

According to the Reserve Bank, shareholders can elect seven non-executive directors at the annual general meeting. The president, after consulting the minister of finance and the SARB’s board of directors, appoints the governor, who chairs the board, and the three deputy governors who serve as executive directors. The president also appoints four non-executive directors, after consultation with the finance minister.

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