Fair share: ANC treasurer general Paul Mashatile (above) has echoed President Cyril Ramaphosa’s stance that the private sector was the biggest agency for employment, not the government. (Delwyn Verasamy/M&G)
The ANC’s plans to nationalise the South African Reserve Bank (SARB) will remain on the back burner for the foreseeable future. The party’s treasurer general Paul Mashatile has argued it would not be wise to spend billions of rand on buying out existing shareholders. He argues that the bank is effectively publicly owned and that the word nationalisation was only semantics.
In an interview with the Mail & Guardian, Mashatile, who hopes to be elected deputy president of the ruling party at its conference next month, said the ANC had put the issue “in abeyance”, but hastened to add this was not because there was opposition to the idea in principle.
“If you look at many central banks, whether it’s the Bank of England and others, they are 100% publicly owned,” he said. “We would like that situation but it’s a question of how you get there. If by getting there, you need to fork out R50 billion, then we have a bit of a problem. Because remember, it’s not even the money we have. We’ve just been borrowing some money to be able to push for infrastructure. So is it wise to take out R50 billion at this stage to buy the private shareholders out? My inclination is maybe not.”
Mashatile said part of the reason the ANC had been unable to nationalise the central bank, valued at R600 billion, was the question of whether to prioritise buying out private shareholders or use the money to deliver services to South Africans.
“Now, one may argue if you nationalise the Reserve Bank, you can just push other people out but that’s not possible. If you want full public ownership, without any private players, you’d have to pay them out,” he said.
“So, we had to make a decision —do we want to take R50 billion out of the fiscus to pay these people or rather use it to support service delivery? I’m sure that debate is going to come again. I think, generally, people tend to agree that perhaps let’s look at whether it is an opportune moment to take a lot of money and pay people out of an institution that we actually really control at the moment.”
Mashatile said the mandate of the SARB — fiscal consolidation and monetary policy — had not been hampered by having private shareholders.
Another debate which has arisen within the ANC is whether to extend the central bank’s mandate to include promoting job creation.
Mashatile said the party’s highest decision-making body had rejected this, arguing this was the role of institutions such as the treasury and the department of trade and industry.
He defended the ruling party’s position on job creation, after its allies in the tripartite alliance slammed President Cyril Ramaphosa for abandoning the ANC’s manifesto in this regard during his State of the Nation address this year.
Shortly afterwards, Ramaphosa was criticised by the left when he claimed it was the private sector’s responsibility to create jobs, with his comments being seen as an admission of defeat in trying to slash runaway unemployment. Labour federation Cosatu accused the government of shifting its responsibility to the private sector.
In the interview, Mashatile doubled down on Ramaphosa’s stance, saying the biggest agency for employment was the private sector and the government’s role was to create an enabling environment for this to happen. This is the same position taken by the main opposition Democratic Alliance.
“I think if we go on and say, we are going to create jobs as a government and so on, I think we will be misleading people. I think it’s important that people must understand that we do need the private sector.”
He continued his argument stating that if the Reserve Bank manages the monetary policy, it will lead to a growing economy which in turn generates employment.
“So you may not want to specify it in the mandate of the Reserve Bank, but the ultimate goal of their policies does lead to employment creation. But it’s a debate that is not closed, and I’m sure it will come back in conference.”
As early as 2018, Ramaphosa raised his concerns in the party’s national executive committee (NEC) that steps to nationalise the central bank could cost the government billions of rands.
The party had taken a resolution at its 2017 Nasrec elective conference to nationalise the Reserve Bank, but Ramaphosa’s allies in cabinet as well as in the NEC showed very little appetite to implement it.
This resolution was predominantly favoured by those allied to Nkosazana Dlamini-Zuma in the 2017 conference. The so-called radical economic transformation faction which fought for the resolution to be passed in 2017 has since used it as part of its campaign against Ramaphosa’s presidency — often pointing to his reluctance around the concept.
At the heart of the concerns around nationalisation are questions about how the Reserve Bank is valued and what private shareholders stand to be paid out if it were to happen.
The bank has two million shares in the hands of private shareholders. No one shareholder or their associates may hold more than 1 000 shares. The shares are traded over the counter and, according to the most recent Reserve Bank data, are valued at R10 a share.
There are however concerns that, were nationalisation be pushed through, some private shareholders would not accept the prevailing share price and might opt to take the matter to international arbitration if their shares were expropriated or they were forced to sell.
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