The ANC’s war about nationalising the Reserve Bank is pointless

Even though there is nothing to be gained from nationalising the Reserve Bank, the issue has become the centrepiece of an ongoing battle for control of the ANC.

Analysts say that even if nationalisation were implemented, it will not affect the bank’s statutory mandate, but ANC radicals would push for it merely as a show of power dominance over the moderates, who are opposed to the idea.

Last week, Reserve Bank governor Lesetja Kganyago said the bank would protect its mandate and independence, which is guaranteed by the constitution, should there be any moves to pass legislation to nationalise it.

Political analyst Ralph Mathekga told The Citizen there were two ANC groups that emerged out of the party’s Nasrec conference who were trying to outdo each other.

One group pursued the radical economic transformation (RET) policies while another was intent on neutralising the radical policies adopted at Nasrec.

The RET advocates, who were aligned to former president Jacob Zuma, were symbolised by ANC secretary-general Ace Magashule, while the moderates opposed to a radical approach were represented by President Cyril Ramaphosa.

Mathekga said should the ANC receive at least 60% of the votes in the 2019 elections, that would spur the radicals to push for a radical approach to policy implementation.

“If they get 60%, they will implement those policies. The only way the ANC would behave is if it gets about 50% in the polls. In that case, it would be forced to consult before it implements any policy,” Mathekga said.

Magashule was last week accused of misrepresenting the party’s position on the bank’s nationalisation after he said the bank would be nationalised.

In his view, Magashule reportedly altered a national executive committee report that the Nasrec resolution calling for the bank’s nationalisation not to be implemented as it was, by adding two sentences suggesting the bank would be nationalised.

Among other advocates of bank nationalisation was Ekurhuleni mayor Mzwandile Masina, who criticised Finance Minister Tito Mboweni for his opposition to nationalisation in their Twitter argument.

Sam Rolland, an economist and econometrician at Econometrix, a Johannesburg economic think-tank, said the nationalisation idea was “purely populist rhetoric” ahead of the 2019 national elections.

He said that as the mandate of the Reserve Bank was derived from the country’s constitution, it could not be changed without amending the constitution, which would be unnecessary.

The bank’s mandate was mainly to ensure price stability in favour of economic growth via inflation targeting.

“The private shareholders of the bank have very little or no say in how it is run. The majority of its board of directors is appointed by the president,” Rolland said.

The economist said the push for the bank’s nationalisation was a populist call that was damaging to the country’s investment prospects.

This – along with the lack of policy certainty on various issues, including free tertiary education – would affect investment prospects negatively.

– ericn@citizen.co.za

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