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SA can still bank on SARB's independence, says Mokonyane in post-Cabinet briefing

Aug 23 2018 20:00
Khulekani Magubane

Cabinet has no concerns that proposed changes to the ownership of the SA Reserve Bank will significantly affect the institution's independence, Communications Minister Nomvula Mokonyane told reporters on Thursday. 

Speaking to media on the deliberations and outcomes of Cabinet's Wednesday meeting, Mokonyane said Cabinet had reiterated that the independence of the SARB was a notable strength for the economy. 

The Cabinet meeting and Mokonyane’s briefing come about a week after the Economic Freedom Fighters announced that it had proposed a bill for the nationalisation of the SARB.

The SARB is one of just six central banks with private shareholders.

The EFF’s bid has been rejected by Democratic Alliance MP Gwen Ngwenya, who called the bill a "hostile takeover of the South African Reserve Bank and its independence".

The ruling African National Congress planned to initiate discussions in Parliament on nationalising the SARB, but abruptly did an about turn.

Maintaining strengths

Mokonyane said South Africa was understood to have a number of strengths as an economy, and that chief among these was an independent central bank, as well as economic expansion and inclusion plans. She said Cabinet further committed to maintaining these strengths.

Asked about the EFF's South African Reserve Bank Amendment Bill, Mokonyane said Cabinet asserted the Reserve Bank's independence, knowing that there were discussions like these taking place in Parliament.

"Any adjustments must be done in a way that does not affect the intention of the bank. Ownership is a matter that can be discussed in processes along with what that ownership means, but that need not change the independence of the institution," said Mokonyane.

SARB officials earlier this year were seemingly mystified by previous efforts to change the central bank’s ownership, saying that changing its ownership would not change anything about the way in which it operated, as it got its mandate from the Constitution and not its shareholders.

Through his amendment bill, EFF leader Julius Malema wants the powers which currently rest with private shareholders to rest with the Minister of Finance.



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