The ANC policy proposal to nationalise the South African Reserve Bank would have no effect on the running of the Bank, nor could it take place any time soon, the governing party said on Wednesday.
The proposal emerged at its national policy conference, which ended on Wednesday.
The rand reacted immediately to the proposal, weakening more than 2% against the US dollar but later paring back some of its losses to close on Wednesday 1.6% weaker.
The announcement that the Bank might be nationalised was a "big own goal" that achieved nothing and upset investors, said Investec CEO Stephen Koseff.
It should not affect the Bank’s independence, as this was enshrined in the Constitution, but the market had reacted negatively because it "doesn’t like the signalling", Koseff said.
The presence of the proposal in the final recommendations, which will now be taken to the party’s national elective conference in December, is seen largely as part of the political manoeuvring between factions. A group aligned to President Jacob Zuma failed in their bid to change the Bank’s mandate. It appeared that addressing the question of ownership broke the deadlock in a tense discussion around economic issues.
Concern that the Bank was being targeted by factions in the ANC emerged after Public Protector Busisiwe Mkhwebane directed Parliament to change the Bank’s constitutional mandate. The Bank and the Treasury are challenging this in court.
The decision to seek a judicial review to set aside Mkhwebane’s report had been taken primarily to protect the Bank’s constitutional mandate, the Treasury said on Wednesday.
ANC economic transformation subcommittee head Enoch Godongwana said there was no intention to tamper with the independence of the Bank.
"The independence of the [Bank] is sacrosanct. There is no intention even in the resolution to tamper with that. The Reserve Bank has 650 private shareholders, they have no say in governance. They get standardised dividends; 90% goes to government anyway."
Godongwana said the ANC-led government did not want to buy the shares tomorrow. "Even if we wanted to [buy shares], there is no fiscal space to buy them … why should we buy shares when we must be building roads and schools?"
When asked why, if it had no effect, the ANC would propose nationalising the Bank, Godongwana said it was a "difficult question". He suggested that delegates did not quite understand the ownership of the bank.
"It’s slightly difficult in a conference like this — people come with views, and on the basis of that express an opinion, which we respect. It’s a resolution of delegates and they questioned why people wanted to own shares. People feel private ownership is a problem."
The Bank reiterated on Wednesday that its shareholding had no bearing on the policy or regulatory role it played.
"The [Bank] is a public institution that derives its mandate from the Constitution. Any notion that a change in the shareholding will amount to a higher degree of control over the [Bank] is incorrect," it said. Even if there were to be a change in shareholding, the Bank would continue to derive its primary mandate and independence from the Constitution. This was a mandate it would execute "without bowing to any pressure, whether it be political or from the private sector".
The Bank did not typically comment on the internal processes of political parties, but "high public interest" in the issue warranted explanation, it said.
The ANC at the same time did not endorse the Mining Charter gazetted by Mineral Resources Minister Mosebenzi Zwane, as pushed for by the pro-Zuma faction. Godongwana said concern was raised over its "design". The question raised was whether free carry shares should be accrued to individuals. Communities and workers should also be considered.
The Chamber of Mines is contesting the charter in court.
ANC structures will discuss proposed changes to the charter and to the ownership of the Bank emerging from the policy conference.
Final decisions on all matters will take place at the party’s national elective conference in December.
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