Among the many controversial resolutions of the 54th National Conference of the African National Congress (ANC) held at the end of December 2017 was the decision to nationalise the South African Reserve Bank (SARB). The Reserve Bank is responsible for the management of the country’s monetary policy. This means it determines interest rates in the economy, and also the amount of money that is circulating in the economy. A reserve bank is one of the most important instruments that countries use to promote economic development. Currently the SARB is one of the few that has private shareholders. The policy of bringing the Reserve Bank directly under government ownership is an old policy of the ANC, dating back to the early 1990s.
The move to nationalise the Reserve Bank is being fiercely resisted by the SARB and by many commentators who support capitalism and free markets. In a statement the SARB said that nationalising the SARB will expose the country to “heightened… risk”. According to the SARB, the private owners or shareholders have no influence on the policies of the SARB. The SARB, however, did not say why the bank must have private shareholders if they do not have any influence and do not make a profit from the ownership of shares.
With the major political battles going on in the ANC it remains to be seen if this policy will be implemented, or if the resolution will just go to sleep on paper as before.