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New fears over Reserve Bank

Jan 26 2010 07:28 Jean-Marie de Waal

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Cape Town - The ANC says it does not have a formal position on whether the Reserve Bank should be nationalised or not.

The secretary general of the ANC, Gwede Mantashe, was merely "thinking aloud" when he told senior members of the ANC's National Executive Committee (NEC) a week ago that this was an issue needing discussion.

But the remark has created uncertainty about government's monetary policy.

Thaba Mufamadi, chairperson of the parliamentary standing committee on finance and member of the NEC, who attended this meeting, said that Mantashe had simply questioned whether the South African model, in which the central bank is not owned by the state, was indeed the most appropriate one.

Elsewhere in the world most central banks are owned by the state, Mantashe, who also chairs the SACP, pointed out to the NEC members.

This is not an issue that can be addressed piecemeal, Mufamadi told Sake24.

The nationalisation of the Reserve Bank needs to be considered in relation to the economy.

South Africa doesn't have a small economy that can easily be isolated from the rest of the world, he said.

Mufamadi declined to say whether he shared Mantashe's view.

In Washington in October 2008 President Jacob Zuma, as leader of the ANC, guaranteed the independence of the Reserve Bank.

The SA Reserve Bank is one of only nine central banks worldwide that has shareholders, although with limited powers.

The bank decides on monetary policy independently of government and the shareholders.

However, the shareholders would like government to buy them out.

The ANC's spokesperson, Jackson Mthembu, reportedly said that any policy change would have to be discussed at the party's 2012 national conference.

The Inkatha Freedom Party (IFP) welcomed Mantashe's remarks.

IFP MP Dr Mario Oriani-Ambrosini responded to enquiry by saying that it was unconscionable that ordinary South Africans had no control over the money supply and their own currency. South Africa could not continue having a private institution controlled by private bankers.

Fundamental decisions are not taken by the board of directors but by the Monetary Policy Committee. There is not a single public servant on the committee, he pointed out.

Oriani-Ambrosini reckons the situation is good for the Reserve Bank and financial institutions, but not necessarily good for workers.

The DA's Dr Dion George says the Constitution calls for the independence of the Reserve Bank. He said that Mantashe's statement that the bank was in "private hands" was misleading.

Specially assigned government officials currently hold most of the voting power while private shareholders, with limited access to dividends, merely offer their support in holding the Reserve Bank's board of directors accountable for their actions.

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.

 
 
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