Party reassures on central bank:
Key entity will stay independent even if government takes it over – Godongwana
THE ANC is mulling over the idea of nationalising the Reserve Bank but says its independence should be guaranteed.
Addressing the media on the outcome of discussions in the economic transformation commission at the ANC’s national policy conference‚ the party’s head of the economics transformation subcommittee, Enoch Godongwana, said that private ownership of the bank was an anomaly.
However‚ he said that come what may‚ the independence of the Reserve Bank should be guaranteed.
“The independence of the Reserve Bank is sacrosanct and there is no intention in the recommendations [from the policy conference] to tamper with that,” he said. “It must remain independent.” In the lead-up to the policy conference‚ there had been a strong push to nationalise the Reserve Bank and bring it completely under the control of the government.
But Godongwana said that‚ while the bank had more than 650 shareholders‚ their influence over the bank’s mandate and decision-making was neither here nor there.
He said even if the bank were to be nationalised‚ South Africans would still not be able to interfere in its operational mandate.
The proposal will be taken to branches for further discussion before it is again tabled before the national conference in December for possible adoption as policy.
On calls for a state bank‚ Godongwana said: “Our intention is that by the time we get to the conference‚ we should have clarified [the formation of a state bank].”
The bank came under scrutiny after public protector Busisiwe Mkhwebane recommended that the constitution be amended to change its mandate.
Mkhwebane recommended that the bank’s mandate be changed to place more focus on growth and not just inflation and the currency.
On Monday‚ ANC KwaZulu-Natal leader Sihle Zikalala told Business Day that his province would push for a discussion on the ownership and the mandate of the Reserve Bank.
The rand extended losses to two percent against the dollar in response to the proposal.
It later recovered to trade down 1.4% at 13.39 against the dollar.
Nomura emerging markets analyst Peter Attard Montalto said: “It’s largely symbolic but is a clear statement of intent from the ANC on more to come.
“Ownership doesn’t legally allow them to do anything as shareholders.
“That conflicts with the constitutional mandate, but it shows the direction of travel here.”
Other recommendations made by the economic committee included conducting a land audit to address the racial inequality in ownership 23 years after the end of apartheid, Godongwana said.