Public Protector Busisiwe Mkwebane caused controversy on Monday after she asked for a Constitutional amendment of the Reserve Bank’s role in the economy – finding that the national bank is currently geared to serving “only the benefits of a few.”
She called for the primary object of the South African Reserve Bank to be changed from “the protection of the value of the currency in the interest of balanced and sustainable economic growth”, to “the promotion of balanced and sustainable economic growth in the Republic, while ensuring that the socio-economic well-being of the citizens are protected.”
At the presentation of her findings she noted that this amendment would be in line with public interests but did not delve into the exact reasons as to why she recommended the changes.
Following the release of her official report, Mkwebane has now officially expanded on her reasons citing academic authors and the Law Reform Commission as the main proponents behind the change.
“Leading authors advocating and promoting the ideology of state banks and nationalisation of monetary currency believe that the notion of the lender of last resort’s status that is inherent to central banks internationally would cease to exist if governments take sole power in creating money through the establishment of state banks”.
“It is in this belief that once the state takes control of creating money and credit, numerous benefits aimed at alleviating economic ails of ordinary economically disadvantaged people may be achieved, unlike our current purely commercial transaction system which only seeks to improve a particular financial sector.”
The debate on nationalisation of monetary currency and creation of state banks is one that has found its way in to our democratic society and is debate which must reach its conclusion by the people of South Africa.
The Republic has an obligation in terms of the Constitution and international instruments to improve socio economic conditions of its citizens through legislative and other measures to alleviate poverty and ensure social justice for all. The South African Government must realise economic rights to its people.”