ANC proposes that the Reserve Bank be nationalised: sources
South Africa’s ruling African National Congress has proposed that the central bank should be wholly state-owned, according to three people familiar with the situation.
The proposal was approved in a plenary session at the party’s policy conference in Johannesburg on Wednesday, said the people who asked not to be identified because it hasn’t been made public.
Decisions taken at the policy conference, which ends Wednesday, need to be ratified at the party’s national electoral conference in December.
Since its establishment in 1921, the Reserve Bank has always had private shareholders who have no say over policy or the appointment of the governor. They vote to appoint seven of the central bank’s 10 non-executive directors.
The board also includes the governor and three deputy governors as executive directors, is responsible for the governance of the central bank.
Removing private shareholders would have no immediate effect on policy though it could be seen as symbolic, said Peter Attard Montalto, chief emerging-markets economist at Nomura International Plc.
“It would be seen as a step toward greater direction of policy and shifts in mandate,” Montalto said by email.
The bank’s shares were delisted from the Johannesburg Stock Exchange in 2002 and are bought and sold on an over-the-counter trading and transfer facility.
The Reserve Bank is owned by more than 600 private shareholders who can’t hold more than 10,000 share each, according to its website. The dividend payable to shareholders is limited to 10 cents per share per year, of a total of 200,000 rand ($14,950) a year, if the central bank makes a profit. The bank’s after-tax profit for the year through March was 1.4 billion rand.
-Bloomberg
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