Bank in for revamp

The Banking Association of South Africa (Basa) has poured cold water over the excitement surrounding President Cyril Ramaphosa’s statements in parliament, ostensibly underpinning the call to nationalise the South African Reserve Bank.

Addressing parliament during his last pre-election question and answer session yesterday, Ramaphosa sought to clarify the ANC’s position on the proposed nationalisation of the bank, making an example of the nationalised Bank of England in the UK.

“As the governing party, we have taken a very clear resolution. The Reserve Bank of our country should be owned by the people of South Africa. That is an important consideration.

“What we do have is a situation where we have external shareholders … who live in various countries and work in various countries and so forth,” he said.

Basa CEO Cass Coovadia said he was reluctant to comment on whether Ramaphosa was simply referring to external shareholding or actual nationalisation in which the state fully owned the bank.

He cautioned that the president was making these statements two months before the election.

“I think we have to certainly accept that we are in a pre-election period and there will be some rhetoric, and so we accept that within that context. To us the most crucial thing is that the independence of the bank is protected,” he said.

He added that the issue of shareholding in the context of the independence of South Africa’s central bank was made moot by the constitution.

“In many ways, the focus on the ownership of the bank is a red herring – we would prefer the status quo to remain where there are private shareholders who have no say over the governance of the bank,” he said.

Ramaphosa’s comments on the Reserve Bank were met with a roar of cheers and heckling, as he explained that the governing party’s stance on central bank ownership was not a new concept.

“What I propose has been done in numerous countries. There are only about six countries in the world which have external shareholding in central banks, and we are one of them,” said Ramaphosa.