Parliament forges ahead with nationalisation of SA Reserve Bank

Mayibongwe Maqhina – IOL

Parliament is forging ahead with a process aimed to amend the law to allow for the nationalisation of the South African Reserve Bank (SARB).

DearSA - SA Reserve Bank

This comes after EFF chief whip Floyd Shivambu made a presentation on Tuesday night to a joint meeting of the National Assembly’s standing committee on finance and National Council of Province’s select committee on finance.

Shivambu’s presentation came almost three years after EFF leader – Julius Malema gave notice to Parliament to introduce the South African Reserve Bank Amendment Bill, six months after the ANC resolved at its December 2017 conference to nationalise the central bank.

The amendment bill could not be processed in the last term of Parliament and was recently revived for processing by the national legislature.

Chairperson of the standing committee on finance Joe Maswanganyi said the bill would be treated like any other bill introduced by a minister.

Select committee chairperson Yunis Carrim agreed that they would look at its content.

However, DA MPs Dennis Ryder and Willie Aucamp, who both serve on the National Council of Provinces, took issue that the NCOP was being involved in the bill’s introduction in the National Assembly and also raised the issue of its constitutionality.

They were overruled by Maswanganyi and Carrim since there was an arrangement in Parliament for committees of Houses to receive the introduction of bills and also to hold public hearings together owing to the Covid-19 pandemic.

In his presentation, Shivambu said as MPs they could individually introduce legislation, which should be discussed and once passed by the two houses, be taken to the president for assent.

He said MPs had the right to approach the Constitutional Court if what was contained in the bill was inconsistent with the Constitution.

Shivambu also said the South African Reserve Bank currently allowed private individuals, including non-citizens, to own shares and that the private shareholders had a role to play in the governance of the central bank, including receiving dividends from the bank’s profits.

He told the meeting that the bill was about the ownership of the bank.

“We appreciate the ongoing debate on the role and independence of the SARB but we deal with the ownership component,” he said, adding that there was nothing wrong with the mandate and role of the central bank.

Shivambu said out of more than 200 central banks worldwide, SARB was among the nine that still have private shareholders.

“By and large, the reserve bank is responsible for the reproduction of apartheid economic and financial inequalities. Significant shareholders are not people of South Africa and the majority are white people,” he said.

He insisted that the shareholders of the bank did not reflect the demographics of the country.

Shivambu said it was time the bank was owned by the country’s 57 million South Africans.

“In terms of the legislation we table, we set out three objectives. We are intending the state to be sole shareholder of shares of the reserve bank.

“We provide appointments of the board of directors, tenure of office of appointed directors and … whoever is minister will do so on behalf of a democratically elected government.”

He also said the finance minister would have the power to appoint directors of SARB.

Shivambu said the bank should no longer be owned by a group of individuals and that it should deal with the concentrated ownership and control in the banking and insurance sector.

“We need to take ownership of the reserve bank to guarantee true sovereignty and autonomy of our country and Parliament. From there we can debate the mandate of the reserve bank,” he said.

Shivambu said the 1994 democratic election had transferred political power but the economy remained in the hands of a few people.

“Today, we are presenting an important legislative milestone in the journey that will transform the South African economy,” he said.

Asked about legal issues surrounding getting the shares from private individuals and compensation, Shivambu said no rational court could grant billions in compensation.

He said there would be no massive financial gain accrued to the current shareholders of SARB as the highest dividend to shareholders was not above R1 000.

“There would never be a sound claim for compensation when we take over ownership,” he said.

Parliamentary legal advisor Noluthando Mpikashe told MPs that the bill in its current form would not pass constitutional muster.

“It is important to note that it does not stop the committee from processing the bill,” Mpikashe said, adding that as legal advisors they were not final arbiters.

Shivambu said issues of constitutionality should be raised at the end of the amendment process.

“No legal advisor can stop any bill from being tabled. It does not exist anywhere in the rules,” he said.

Shivambu also said the parliamentary process, which entailed public comments, should be allowed to take its course.

After some discussion, which saw Shivambu clash with Carrim, the MPs decided to advertise the bill to obtain input from the public.