South Africa’s ANC proposes nationalising central bank

South Africa’s ANC proposes nationalising central bank

South Africa’s ruling African National Congress has re-triggered market concern about the independence of the Reserve Bank after reports it had agreed at its policy conference on Wednesday that the central bank should be nationalised.

Two party sources said a proposal to make the central bank fully state-owned was agreed at a party plenary session.

The rand currency extended losses to 2 percent against the dollar in response to the proposal that filtered out of a closed-door session on the last day of the conference. It later recovered to trade down 1.4 percent at 13.39 against the dollar.

Calls for nationalisation follow an earlier row over the central bank’s mandate that rattled foreign investors just as South Africa’s economy fell into recession and as unemployment is close to 28 percent.

Following the plenary on Wednesday, the head of the ANC’s economic transformation committee Enoch Godongwana told reporters the bank’s independence should be guaranteed but it was a “problem” that the regulator was in private hands.

“The resolution agrees that the independence of the Reserve Bank should be guaranteed … But there is general agreement that the Reserve Bank that is still private centric is an anomaly,” Godongwana said.

Most central banks in the world are wholly state-owned. But the mention of nationalisation in South Africa is enough to spook investors as left-wing elements of the ANC have also called for mines and banks to be state-owned.

“It’s largely symbolic but is a clear statement of intent from the ANC on more to come,” said Nomura emerging markets analyst Peter Attard Montalto.

“Ownership doesn’t legally allow them to do anything as shareholders. That conflicts with the constitutional mandate, but it shows the direction of travel here.”

Policy recommendations made at this week’s conference will only be approved for implementation at a December summit when a successor to President Jacob Zuma will also be chosen.


The proposal is particularly sensitive after an official anti-graft watchdog last month recommended the central bank’s mandate be changed to place more focus on growth and not just inflation and the currency.

The South African Reserve Bank has been privately owned since its establishment in 1921.

The shareholders have no rights or involvement in the conduct of monetary policy, financial stability policy or banking regulation. Read more on this here.




You might also like…

Zimbabwe’s financial system is living on borrowed time – and borrowed money

  An illegal money changer holds bond notes outside a bank in Zimbabwe’s capital Harare. Reuters/Philimon Bulawayo Roger Southall, University of the Witwatersrand Zimbabwe’s financial system increasingly resembles a house of cards. Were one card to give way – for instance, if South Africa’s power utility, Eskom, were to have the temerity to suggest that […]

West African SFL Conference Challenges Perception of LGBT Rights in Nigeria

 This year’s West African Regional Conference (WARC) held on the 27th of October gathered 358 participants. As Olumayowa Okediran noted, “The most exciting thing about this is not the number of attendees, but the fact that our RCs in Africa (Nigeria in particular) are becoming more radical.”Just a few years ago, it was unthinkable to […]

Benin, Liberia and Nigeria lead Africa in ranking at maiden global robotics competition (SEE FULL RANKING)

 Benin and Liberia were ranked highest among the 40 African countries that participated in the just ended FIRST Global Challenge robotics competition held in the United States capital, Washington DC. The six-round maiden international robotics event saw 163 national teams including 6 continental teams made up of students from around the world competing with the common goal of increasing […]