ANC reaffirms role of Reserve Bank
Governing party supports independence of institution in its annual policy statement
The ANC has reaffirmed the Reserve Bank’s role, mandate and independence in its annual policy statement.
President Cyril Ramaphosa delivered the party’s policy statement, which was drawn up by the ANC’s national executive committee in Kimberley on Saturday.
The comments on the Reserve Bank were contained in the written statement of the ANC, which stated that “in line with the resolutions of the 54th national conference we reaffirm the role, mandate and independence of the Reserve Bank and will undertake the process towards full public ownership of the Bank in a manner and according to a time-frame that is prudent and affordable and that does not benefit private shareholder speculators.”
The assurance may allay fear of renewed attacks by some ANC leaders on the Reserve Bank in the run-up to the governing party’s national general council later in 2020.
The gathering will mark the midpoint of the ANC leadership’s term, when Ramaphosa will face pressure to show he has made progress on some of the party’s more populist resolutions adopted in December 2017, including nationalising the Bank.
The Bank in 2019 came under criticism from labour unions and some senior ANC members who want interest rates to be reduced. They argue that the Bank’s drive for low inflation is misplaced and that it should do more to boost growth in an economy that contracted in the first and third quarters of 2019 and in which almost 30% of job-seekers are unemployed.
ANC secretary-general Ace Magashule caused shock waves in financial markets in 2019 when he said the Bank’s mandate should be changed to ensure it does more to foster economic growth and create jobs.
Ramaphosa quickly moved to repudiate those comments. In 2017, public protector Busisiwe Mkhwebane tried to remove references in the constitution to the Reserve Bank’s inflation mandate, but that was struck down by a court ruling. Mkhwebane, as part of her finding in the Absa-Bankorp matter, directed parliament to amend the constitution to change the mandate of the Bank. She lost the case.
The Reserve Bank's monetary policy committee (MPC) targets inflation in a band of 3% to 6% and it has made it clear it prefers the rate close to 4.5%.
Of the 15 economists surveyed by Bloomberg, 12 forecast the panel will keep its key rate unchanged at the next MPC meeting on January 16, even with price growth at a nine-year low.
The ANC decided at its 2017 conference that the central bank, one of a handful worldwide owned by private investors, should be nationalised. While the shareholders have no say on policy, some proponents of the ownership change argue that this is an important part of adjusting how the institution works.