South Africa’s ANC pro­poses na­tion­al­iz­ing cen­tral bank

Kuwait Times - - BUSINESS -

South Africa’s rul­ing African Na­tional Congress pro­posed at its pol­icy con­fer­ence yes­ter­day that the cen­tral bank be na­tion­al­ized, two party sources said, news that saw the rand ex­tend losses against the dol­lar. The pro­posal to make cen­tral bank fully state-owned was agreed at a party ple­nary ses­sion, the sources said. It fol­lows an ear­lier row over cen­tral bank in­de­pen­dence that rat­tled for­eign in­vestors just as South Africa’s econ­omy fell into re­ces­sion and as un­em­ploy­ment is close to 28 per­cent.

Fol­low­ing the ple­nary, the head of the ANC’s eco­nomic trans­for­ma­tion com­mit­tee Enoch Godong­wana told re­porters the bank’s in­de­pen­dence should be guar­an­teed but it was an “anom­aly” that the reg­u­la­tor was in pri­vate hands. Pol­icy rec­om­men­da­tions made at this week’s con­fer­ence will only be ap­proved for im­ple­men­ta­tion at a De­cem­ber sum­mit when a suc­ces­sor to Pres­i­dent Ja­cob Zuma will also be cho­sen.

The pro­posal is still likely to raise con­cerns about the in­de­pen­dence of the re­serve bank af­ter an anti-graft watch­dog rec­om­mended its man­date be changed to place more fo­cus on growth and not just in­fla­tion and the cur­rency. The rand ex­tended its losses to as much as 2 per­cent lower in response to the pro­posal on the na­tion­al­iza­tion of the bank fil­ter­ing out of a closed­door ses­sion on the last day of the con­fer­ence. The South African Re­serve Bank has been pri­vately owned since its es­tab­lish­ment in 1921.

The Bank was de-listed from the Jo­han­nes­burg Stock Ex­change in 2002 and its shares now trade on an Over-the-Counter Share Trans­fer Fa­cil­ity mar­ket. It cur­rently has more than 660 share­hold­ers. — Reuters

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