DA will fight bill to nationalise Reserve Bank

19 August 2018 - 13:42 By Timeslive
The South African Reserve Bank building in Pretoria. File photo.
The South African Reserve Bank building in Pretoria. File photo.
Image: GALLO IMAGES

The DA will fight against the adoption of a bill by Parliament aimed at nationalising the Reserve Bank‚ saying it opposes any threat to the central bank’s independence.

The South African Reserve Bank Amendment Bill‚ introduced in Parliament on Thursday by EFF leader Julius Malema‚ proposes that the state be made the sole shareholder of shares in the bank.

The DA said on Sunday there could be no meaningful public interest motive in nationalising the Reserve Bank‚ only the furtherance of private political interests.

“The nationalising of the South African Reserve Bank (SARB) is a hostile move in a long game of EFF political manoeuvres to influence the mandate and operations of the Reserve Bank and ultimately South Africa’s banking system as a whole.

“This is also an electoral game for the EFF. Whether or not the Bill is passed‚ the EFF hopes to dominate the ANC’s radical agenda‚ and position itself as the authentic party of the left‚” said Gwen Ngwenya‚ a DA member of the parliamentary finance committee.

She said nationalisation would mean that the minister of finance would have the ability to appoint every board member from a list of nominees that were confirmed by a panel also largely appointed by the minister.

At present‚ private shareholders were limited to holding 10‚000 shares and to electing a minority of the non-executive Board members. The provision of a fixed dividend meant that shareholders did not invest with the motive of making profits. In addition‚ shareholders played no role in the formulation and implementation of monetary policy and were excluded from core functions‚ Ngwenya pointed out.

“The conflict of interests doesn’t stop there; this Bill has to be interpreted in conjunction with the EFF’s Bank’s Amendment Bill enabling the state to own banks. Coupled with greater ministerial involvement in the Reserve Bank‚ this will give the government enhanced ability to influence the rules in a market in which it also competes‚” Ngwenya said.

“As South Africa confronts the public losses due to state capture‚ another likely avenue for corruption should not be opened up‚” she added.

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