South Africa 20.8.2018 10:05 am

DA vows to challenge nationalisation of Reserve Bank

The SA Reserve Bank.

The SA Reserve Bank.

The party says the bill to nationalise the bank is an electoral gimmick with which the EFF hopes to dominate the ANC’s radical agenda.

The Democratic Alliance has described attempts to nationalise the South African Reserve Bank (Sarb) as a “hostile takeover”, saying it will oppose what it sees as a political manoeuvre to influence the mandate and operations of the central bank and the country’s banking system as a whole.

The radical Economic Freedom Fighters’ (EFF) leader Julius Malema last week introduced a bill in Parliament to nationalise the central bank.

The Reserve Bank Amendment Bill would make the state the sole holder of the shares in the bank and “provide for the appointment of certain board directors by the (finance) minister”.

DA member of the finance committee Gwen Ngwenya said this was an electoral gimmick with which the EFF hoped to dominate the ruling African National Congress’ radical agenda, and position itself as the authentic party of the left, whether or not the Bill was passed.

The DA governs some key metros with EFF’s political backing.

Ngwenya argued that there would be a conflict of interest if the finance minister Nhlanhla Nene was given powers to appoint every board member from a list of nominees confirmed by a panel, noting that central bank shareholders do not invest with the motive of making profits as per the provision of a fixed dividend.

“There can be no meaningful public interest motive in nationalising the Reserve Bank, only the furtherance of private political interests. Nationalisation will mean that finance minister will have the ability to appoint every board member from a list of nominees that are confirmed by a panel also largely appointed by the minister,” Ngwenya said.

“As South Africa confronts the public losses due to state capture, another likely avenue for corruption should not be opened up. This Bill has recklessly been submitted without the necessary due diligence. The DA opposes threats to Reserve Bank independence and will ensure that the true costs of the Bill are tabled and debated.”

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