MONETARY POLICY
DUMA GQUBULE: Nationalise Bank and target development
A developmental central bank can become the most important institution for economic development in the country
SA must nationalise the Reserve Bank. But there is no point doing so if the government does not also scrap inflation targeting and change the mandate of the Bank to include growth as well as employment. The composition of the monetary policy committee must also be changed to include members of civil society and create a developmental central bank that serves the people of SA. There are only eight countries in the world, including SA, that have not nationalised their central banks, according to a paper by Wits academic Jannie Rossouw. SA’s Bank has two million issued shares that trade at about R10 each. The shares are worth only R20m. Since the shareholders only get a dividend yield of 1%, it is clear that making money is not their major motive. If the government offered them a large premium, say R50 a share — which would still value the Bank at only R100m — the majority would sell their shares. The lunatic fringe who believe they have a right to the Bank’s gold and foreign exchange ...
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