The ANC has shelved plans to nationalise the SA Reserve Bank (SARB) because it would require “massive resources” which South Africa does not have at the moment, according to a Bloomberg report published on Wednesday.
The party adopted a resolution at its 2017 National Conference to place SARB under public ownership, citing national sovereignty concerns.
Speaking in an interview however, ANC Treasurer-General Paul Mashatile said spending public resources to buy out SARB’s private shareholders would be “unjustified” under the prevailing economic difficulties.
“We would not want to rush to go in that direction because there are other implications. Our view is that we want these resources to be channeled rather to infrastructure projects,” he said.
Mashatile said the private shareholders could stake claim to SARB’s assets, including gold and foreign reserves worth a reported $56 billion (around R916 billion). “That can be a problem [because] it will make the bank very expensive,” he explained.
The push to nationalise SARB has mainly come from the “radical economic transformation” (RET) grouping within the ANC and the opposition EFF.
EFF’s bill in Parliament
EFF Deputy President Floyd Shivambu tabled a private member’s bill in Parliament in August to nationalise the bank without compensation.
“We have a situation in South Africa where a significant number of shareholders of Reserve Bank are not people of South Africa and the majority are white people and we know where they come from.
“Our proposal is to take the shares from 800-odd private shareholders to 57 million South Africans,” Shivambu said. He further argued that the idea of paying billions to buy out private shareholders was a “side show.”
“Currently, each of the two million shares is R10, meaning that in total the shares issued by the SARB is R20m – meaning that no one has paid billions to gain shares, so why would you claim billions as compensation?” he asked.
Parliament’s legal services however advised that the EFF’s bill may not “pass constitutional muster.” This is because section 25 of the constitution, which the legal services said does not permit expropriation without compensation, has not yet been amended.
SARB is among eight banks in the world that still have private shareholders. Others are the central banks in Belgium, Greece, Italy, Japan, Switzerland, Turkey and the US.
The law does not permit a single SARB shareholder to hold more than 10,000 shares. Annual dividends are also capped at 10 cents per share, which means a shareholder can only get a maximum of R1,000 per annum.