South Africa looks at new law to nationalise the Reserve Bank

Parliament has officially revived the bill which proposes the nationalisation of South Africa’s Reserve Bank, Reuters reports.

The bill – that spooked investors when first unveiled a year ago – comes at an awkward time for President Cyril Ramaphosa, who is on an investment drive to boost an ailing economy.

He has to juggle his pro-business approach with left-leaning elements of the ruling African National Congress that want to legislate for land expropriation without compensation, among other policies.

In August 2018, the EFF tabled the South African Reserve Bank Amendment Bill, which seeks to nationalise the central bank.

South Africa’s central bank is one of the few in the world that’s still owned by private shareholders.

The draft bill provides for the following:

  • The State as the sole shareholder of the shares in the Bank;
  • The responsibility of the President of the Republic in consultation with the Minister of Finance and Parliament to appoint the Governor, Deputy Governors and all other directors of the Bank; and
  • The role of the Minister of Finance as a shareholder to exercise the rights attached to the shares in the Bank.

While the bill is a ‘private members bill’, it aligns with the ruling ANC’s own position on nationalising the Reserve Bank which means it may gain traction from the ruling party.

However, the government may ultimately decide to publish its own draft bill around nationalisation instead of using the EFF’s framework.

The bill will now be referred to the Standing Committee on Finance for further deliberations and public input before the lower house of parliament votes on it.

If the bill is passed, it woud then go to parliament’s upper house for approval before Ramaphosa signs it into law.

Read: This graph shows how BEE has failed in South Africa

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South Africa looks at new law to nationalise the Reserve Bank