Economists lambaste EFF ‘election tactic’ to nationalise South African Reserve Bank

ECONOMISTS have slammed the introduction of a bill before Parliament by the Economic Freedom Fighters (EFF) which seeks to nationalise the South African Reserve Bank.

EFF leader Julius Malema introduced the South African Reserve Bank Amendment Bill on Thursday, which seeks to make the state the sole holder of shares in the bank and to provide for the appointment of certain board directors by the finance minister.

Economist Mike Schüssler said nationalising the country’s central bank would not benefit the country, but instead increase state expenses.

“It is not a good idea to nationalise the Reserve Bank. Government will have to spend more money to take out the private shareholders.

“The fact of the matter is that, this is not going to change anything when it comes to policy because government appoints all the people who do policy work, and appoint all the members of the monetary policy committee,” said Schüssler.

In its quest for nationalisation of the central bank, the EFF is backed by the ANC. The ANC resolved at its December conference to nationalise the central bank. In March, the ANC withdraw its initial motion to debate the nationalisation of the Reserve Bank, saying that it needed more time to consult on the matter within its structures and with key stakeholders.

Head of the Presidency Zizi Kodwa said that the resolution still stands.

Schüssler said the move was nothing but an election tactic by the EFF, which could be damaging to the country. “It is not a worthwhile exercise at all. I think South Africa’s economy will do better in the current situation, than the one they’re trying to create.

“This move by the EFF is an election tactic. It will not benefit the people of South Africa in any way. It runs the risk of being harmful. There is no positive interest that can be derived from nationalising the Reserve Bank,” said Schüssler.

EFF chief whip Floyd Shivambu, however, said by nationalising the Reserve Bank, the country would gain “economic sovereignty”.

“This nationalisation will guarantee the economic sovereignty of South Africa. Currently the Reserve ( Bank) has got a lot of foreign shareholders.

“The nationalisation of the Reserve Bank doesn’t mean that we are going to interfere with its relative autonomy. We are not going to alter the autonomy of the bank but remove private shareholders,” said Shivambu.

He slammed critics who said the move could have a negative impact on investor confidence.

“Every time there has to be a change in the country, the so-called economists raise the issue of investors’ confidence. There is no invest- ment in South Africa now. Investment must come from the state in terms of directing to important areas,” said Shivambu.

DA MP, and the party’s head of policy Gwen Ngwenya, said the party wouldn’t support the EFF and the ANC in their quest for a state-owned central bank. She accused the EFF of crafting a route for “undue state influence and corruption”.

“Julius Malema and the EFF are playing Russian roulette with the economic prospects of the country,” said Ngwenya.