Reserve Bank governor Lesetja Kganyago. Picture: FREDDY MAVUNDA
Reserve Bank governor Lesetja Kganyago. Picture: FREDDY MAVUNDA

The ANC’s resolution to nationalise the Reserve Bank is based on ideology and a misunderstanding of what it does, according to the Bank’s governor Lesetja Kganyago.

The ANC decided at a conference in late 2017 to nationalise the Bank, which is one of a handful globally owned by private investors. The shareholders have no say over monetary policy decisions and the central bank’s mandate — to target inflation — is set by the government.

President Cyril Ramaphosa said in March that the ANC is determined to follow through on the resolution because it will affirm the country’s sovereignty.

Kganyago has warned that the move could mask an attack on the Reserve Bank’s independence.

“I can’t see any benefits and frankly it’s a zombie debate,” he said in an interview with radio station Power FM on Wednesday.

“It doesn’t matter how much you explain, in the end people won’t say ‘we want to feel we have nationalised it and that’s it’. To what end is not what anybody answers.”

Kganyago estimates it would cost R20m to buy out private shareholders, but if those shareholders take the decision to an international court and successfully claim that the Bank owns the nation’s gold and foreign-exchange reserves, it could cost as much as R100bn.

Former president Thabo Mbeki weighed in on the nationalisation debate earlier in the week, saying such a move would be pointless.

“I really to this day do not know what anyone would gain by the nationalisation of the Reserve Bank except to say they had done it,” Mbeki said during a visit to the ANC pavilion at the Rand Easter Show to pledge his support for the ANC ahead of the May 8 elections.

“Nothing would change in terms of the behaviour of the Reserve Bank, nothing.” — with Staff Writer

Bloomberg