POLITICS
20/12/2017 21:38 SAST | Updated 20/12/2017 22:35 SAST

SA Reserve Bank Must Be Owned By The Public, Says ANC

The party wants private shareholders of the SARB to be bought out

Waldo Swiegers/Bloomberg via Getty Images
The headquarters of the South African Reserve Bank in the Central Business District (CBD) in Pretoria.

The ANC has decided that private shareholders in the SA Reserve Bank (SARB) should be bought out as it is an anomaly to have private owners holding shares in the central bank. The SARB should be publicly owned and talks should start to buy out private shareholders, the party has decided.

This does not mean nationalisation of the bank. The buy-back will be done without compromising the independence of the SARB, the party decided.

Since the 1920s, private owners have been able to buy shares in the SARB, but as it buys back these shares, the ANC says it does not want to make speculators rich.

Speaking at the annual meeting of shareholders in July, SARB governor Lesetja Kganyago said: "...shareholders in the SARB have very limited rights; have no role whatsoever in the setting of, or influencing, the key mandates of the SARB, i.e. monetary policy and financial stability policy; have no sway over the day-to-day management of the SARB; are restricted to a maximum of 10,000 shares per shareholder out of 2-million issued shares (including those of their associates); receive a fixed return on their shares of 10 cents per share from profits made (this amounts to an overall divided payment by the SARB of R200,000 per year).

In fact, 90% of the SARB's profits are transferred to government, and the remaining 10% is allocated to the SARB's reserves. Shareholders do not have any claim on the foreign exchange reserves of the SARB; and are unable, by means of a resolution or otherwise, to amend or change the SARB's affairs by deviating from the prescriptions of the SARB Act.