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Cape Town – The battle to nationalise the Reserve Bank continues, as the Economic Freedom Fighters (EFF) has said it will table its own motion.
This follows the decision by the ANC to withdraw its motion, which was to be debated by the National Assembly on Tuesday.
The reasons given by the ANC was to allow for greater consultation within its structures and with key stakeholders.
“If the ANC does not table a motion on the nationalisation of the SARB, the EFF will use its next opportunity to table a comprehensive motion on nationalisation of the Reserve Bank,” the EFF said in a statement.
The EFF believes that the nationalisation of the South African Reserve Bank (SARB) is an urgent matter.
“It must mandate the Standing Committee on Finance to commence the process of drafting legislation that will culminate in state ownership of the SARB, whilst retaining its autonomy as called for in the Constitution,” EFF spokesperson Mbuyiseni Ndlozi said.
“The relative autonomy of the Reserve Bank is important so that politicians are not tempted to divert some of its resources into corrupt and self-enrichment activities.”
The EFF criticised the current form of ownership. “The SARB is owned by private shareholders, some of whom are foreigners with no patriotic interests and commitment to South Africa. The status quo is unacceptable and should be changed through decisive political action.”
The SARB in turn has not deviated from its stance that changing its ownership structure could raise financial and economic risks for South Africa.
Since its establishment in 1921, the Reserve Bank has always had private shareholders. However, the shareholders have no say on policy decisions taken by SARB in implementing its mandate. They can elect a maximum of seven non-executive directors of the board, from a list of candidates from a panel chaired by the governor, Fin24 previously reported.
SARB shareholders can also discuss the annual report and audit reports of the SARB. They can appoint auditors and determine their remuneration package.
Legislation
The EFF also wants the legislation to make provision for the SARB to have more capacity to provide prudential oversight over existing banks. This is to prevent “financial malpractice”. Additionally, the legislation should set a framework to deconcentrate bank ownership.
“Currently only six banks own more than 90% of banking services in South Africa and they operate like a cartel,” Ndlozi said.
Among other things, the EFF called for the Reserve Bank to expedite the licencing of Postbank into a fully-fledged state bank. “The SARB must also create an enabling environment for the creation, existence and sustenance of fully black-owned and cooperative banks.”
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