Why the ANC is gunning for the Reserve Bank (holder of ‘money printing presses’)

The ANC is investigating a change in ownership of the South African Reserve Bank (Sarb).

A few weeks ago Public Protector Advocate Busiswe Mkhwebane found the Reserve Bank’s monetary policy mandate should no longer focus on inflation targeting.

The Money Show’s Bruce Whitfield asked Investec Economic Strategist Chris Becker why the ANC is moving on the Sarb.

Becker says it’s more complicated than a capture.

He gave the following reasons why the ANC is mulling this over:

  • A leftward shift of policy and political risk is negatively impacting sovereign ratings and the ability of banks to fund mines and SOEs.

  • In ANC policy the SOEs are the "axis of the development agenda" (In other words; they will never be privatised due to developmental state/socialist ideological reasons. This is explicit in ANC policy documents.

  • Policy risk in the mining sector and undercapitalised SOEs means banks/capital markets/investors are stepping back from SOEs and possibly even mines.

  • The Tripartite Alliance says that an "investment strike" in mines and SOEs orchestrated by neoliberals and capitalists (in other words; White Monopoly Capital) aims to undermine Government.

  • Hence, they are readying an alternative financing angle to continue the growth and transformation agenda (Sarb and, probably, a public bank as well) to be "pro-growth and for wellbeing of citizens".

  • It's an ideological onslaught from the Tripartite Alliance.

Listen to the interview in the audio below (and/or scroll down for quotes from it).

The US Fed has a dual mandate.

Chris Becker, Investec

The discussion should actually be that the target for inflation is too high.

Chris Becker, Investec

The central bank can’t create prosperity.

Chris Becker, Investec

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This article first appeared on 702 : Why the ANC is gunning for the Reserve Bank (holder of ‘money printing presses’)


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