ANC secretary-general Gwede Mantashe (right) has moved closer to the ANC Youth League position on the nationalisation of mines, encouraging party leaders to expand the debate to include other sectors such as the banking industry.
In a report presented to the ANC national executive committee lekgotla last weekend, Mantashe said the ANC needed to explain the role of the state in the economy and the redistribution of wealth and income. He said the ANC must answer whether it has "made progress in ensuring that the people share in the country's wealth".
He said the Freedom Charter demanded that the mineral wealth, the banks and monopoly industry be transferred to the people.
Mantashe hinted that the Reserve Bank should also be nationalised.
He said it was curious that the ANC had not opened the discussion on the role of the state in the banking industry.
"Including discussing the fact that the South African Reserve Bank is one of less than five central banks in private hands in the world," Mantashe said.
"If the Postbank were to have a proper banking licence, a solid base (for nationalisation) would be created and the debate would have meaning instead of being abstract."
Last year, the ANC, Cosatu and the SACP jointly agreed that the mandate of the central bank needed to be reviewed and broadened.
Inkatha Freedom Party leader Prince Mangosuthu Buthelezi has also previously called for the nationalisation of the Reserve Bank.
Two years ago, Buthelezi told parliament that "we must have the courage to rein in and reform the Reserve Bank.
"We should nationalise it so that it may no longer be owned by private entities, or even foreigners."
He argued that within this context it would be appropriate to fulfil the promise made by the government as early as 1996 that exchange controls would be abolished.
The Reserve Bank is a private entity established by a 1983 Act of Parliament. It is owned by private shareholders. The law specifically requires that its shareholders remain secret.
Only the governor and a few directors are appointed by the government.
Source: Sunday Times
I provide some detail to help with clarification.
ReplyDeleteCurrently the SARB is owned by shareholders who have the power to elect half of the Bank’s board of directors, while the other half are appointed by the President.
The Governor and three Deputy Governors of the Bank, are executive directors and currently hold positions on the MPC, were appointed by the President and not the shareholders.
The SARB receives its mandate from government and its independence is guaranteed in the country’s Constitution. Any profits the Bank makes over a nominal dividend distribution is payable to the government.
A change in ownership of the Bank would have little bearing on the policy decisions and day-to-day operations of the Bank.
The National Union of Metalworkers of South Africa (NUMSA) has said it supports Gwede Mantashe's call for the nationalisation of the Reserve Bank.
ReplyDeleteThe call is consistent with both the South African Communist Party (SACP) and the Congress of South Africans Trade Unions (COSATU) calls for the Reserve Bank to play a key and strategic role in job creation and mitigating the global financial crisis in the midst of jobs bloodbath, massive squalor and poverty infested amongst the broad sections of the working class and the poor. ...
The policies of the Reserve Bank must be aligned to the objectives of the developmental state and agenda as dictated by the ruling ANC alliance, as opposed to the whims and dictates of the market fundamentals.
The Congress of South African Trade Unions (COSATU) has reported that it fully supports the proposal that the SA Reserve Bank should be nationalised.
ReplyDeleteIt is a dangerous anomaly that a body which should be protecting the public interest when it makes decisions on interest rates, which have a major impact on all South Africans, should be owned by a group of anonymous private shareholders.
COSATU does not even know the identity of these shareholders, but the strong likelihood is that they are wealthy financiers and industrialists with very different interests to those of the majority of the people. And it is one of only a handful of Reserve Banks around the world that is in private hands. It makes a mockery of the SARB’s claim to be ‘independent’.
The Freedom Charter called for the people to share in the country’s wealth. How can we achieve that when the country’s most important financial institution is not under any democratic control by, or accountability to, the people.