Addressing his audience at a guest lecture at Stellenbosch University (SU) on 6 March, Lesetja Kganyago laid out his case for the South African Reserve Bank (SARB) remaining privatised.
“Accountability is the flip side of independence,” said Kganyago. “A privately owned reserve bank is forced to be transparent and accountable for its actions.”
Kganyago’s statements come amidst rising rhetoric from high-ranking members of the ANC in favour of the nationalisation of the SARB. In a Q&A session in parliament on 7 March, President Cyril Ramaphosa made his intention clear that the nationalisation of the Reserve Bank was a part of the ANC agenda.
According to Ramaphosa, “what doing away with private shareholders will do, is give us [the South African public] sovereignty.”
Kganyago, on the other hand, outright dismissed nationalisation prospects. Speaking with visible fervour in front of his Stellenbosch audience, the governor asserted that private shareholders have no influence whatsoever over monetary policy.
“There are no ‘ifs’ and ‘buts’ when it comes to doing our job,” the governor says. “ There are only tough decisions to be made.”
SARB Governor Lesetja Kganyago addresses professionals and students at Stellenbosch University. PHOTO: Byron Mühlberg
The sole job of the SARB, by constitutional mandate, is to maintain price stability by managing interest and inflation rates.
According to Kganyago, the fact that SARB’s mandate is predicated within the Constitution ensures that private shareholder interests are kept in line with sustainable economic growth.
The monetary vision for South Africa, according to Kganyago, is indeed an optimistic one. However, he says such optimism remains under the proviso that the Reserve Bank stay privatised.
“There is a South African renewal underway,” says Kganyago. “The youth, the working class, and the impoverished are the groups of society which benefit the most when interest rates are properly managed.”
“The argument in favour of nationalisation is, in fact, a zombie argument. Every time you kill it, it just keeps coming back to life!”