ANC 'only thinking' of nationalising reserve bank

  1. Posted on Wednesday 27 January 2010 - 16:10
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    South Africa's ruling party African National Congress has said that a recent call to nationalize the country's Reserve Bank was simply to test the water and that no plans have been put in place to do so.
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    ANC spokesman Jackson Mthembu said that the “status quo” would not change. Currently the South African Reserve Bank is owned by private shareholders in an effort to keep the bank independent.

    Over the last week, debate has raged between the ANC left-leaning alliance partners and business as to whether the State should buy out the Reserve Bank.

    The South African Communist Party (SACP) wants more power to manipulate the mandate of the reserve bank away from price stability towards providing stimulus for job creation by cutting rates further. At the heart of the matter is that the SACP believes inflation targeting in a band of 3 to 6 percent has been too harshly applied, cooling both inflation, but also hurting jobs.

    However, ANC secretary-general Gwede Mantashe said, “It’s only an opinion and it’s a long way to go before we change any policy.”

    Mantashe is also chairman of the SACP.

    Mantashe confirmed that the ANC was “no proposal on nationalization,” but that the ruling party’s economic transformation committee may decide to debate the issue at the party national conference in 2012.

    Business is concerned that nationalizing the reserve bank would hurt the country’s ability to borrow as it may hurt ratings, while sending the wrong signal that the ANC is trying to assume greater control over the bank.

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