Nationalising Reserve Bank ‘simply not prudent’ - Ramaphosa

Staff Writer | Jun 08, 2019
And, the president says, ‘recent public spats’ about the national bank are ‘not being helpful’ and risk undermining investment.

Whatever the African National Congress (ANC) manifesto says about the party’s ‘desire’ to see the South African Reserve Bank (SARB) becoming ‘publicly owned’, such a move would ‘come at a cost’ and ‘is simply not prudent’.

So says President Cyril Ramaphosa after several days of inter-factional sniping and evidence of a sharp division within the ANC alliance.

Observers judge this public argument to be a key test for Ramaphosa. 

While the ANC’s partners in the South African Communist Party insist the government must stick to the letter of the 2019 election manifesto in pursuit of ‘radical’ transformation to further the aims of the ‘national democratic revolution’, Ramaphosa is evidently anxious to cool the party’s ardour – though he stopped short of clarifying government policy.

He said in a statement: ‘It is our desire for the South African Reserve bank to be publicly owned. However, we recognize that this will come at a cost, which given our current economic and fiscal situation, is simply not prudent.’

The statement was issued in the name of ‘ANC President, Cde Cyril Ramaphosa’, and reflected the opinions of ‘(t)he National Officials of the ANC [at] a meeting on 6 June 2019 at Luthuli House’.

The statement, which cited ‘the contraction in the GDP growth rate by 3.2% on the back of a poor average rate of growth of 0.8% in 2018 and an unemployment rate in QI 2019 rising to 27.6%’, said: ‘This serious state of affairs reaffirms the observations of the ANC Lekgotla held from 1-3 June 2019, that we need to seriously tackle the challenges facing South Africa together and with a sense of urgency and unity of purpose.’

The IRR warned in a statement earlier this week, on the implications of the country’s dire economic conditions, that the government must embark on ‘wholesale policy reversals if South Africa is to stage an economic recovery.

In the absence of such reform, ‘further credit rating downgrades are inevitable, which will increase the cost of capital as South Africa slips further down the economic spiral’.

 

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