Breaking cover: The South African Reserve Bank building in Pretoria. The central bank and the treasury have revealed a bank deposit insurance proposal.
At the time of writing, the outcomes of the discussions around economic transformation had not been delivered.
But some of the most contentious debates were due to take place in this commission —particularly after several additional recommendations were set down for discussion at the July policy conference. These include proposed recommendations on the nationalisation of the South African Reserve Bank, as well as a change to its mandate to include price stability and employment creation and economic growth;, expropriation of land without compensation; and the introduction of prescribed assets.
It was viewed as an “historical anomaly” that the South African reserve bank had private shareholders. It was recommended that the Reserve Bank be entirely state owned and that the government develop a proposal to nationalise the bank in a manner “that does not benefit private shareholder speculators”.
The bank has a number of private shareholders, some of whom have warned that they will not permit the nationalisation of their shares without compensation.
Shareholders such as German national Michael Duerr believe the shares trade at well below their value – in the region of around R4700 – rather than the R9.60 last traded.
The inclusion of prescribed assets – which would force pension funds to invest money in certain asset classes such as parastatal bonds – was aimed at directing financial resources towards developmental purposes.
But this has been criticised as a response to the reluctance of private investors to invest in state owned entities that have been plagued by poor governance and financial mismanagement. This proposal has been questioned by at least one NEC member, as there is an argument that simply addressing the issues of governance, would restore investor confidence in these entities.