South Africa’s ANC proposes nationalizing central bank

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