Reserve Bank's independence is a key Constitutional requirement

A report in today's Sunday Independent (see report) that ANC National Executive Committee (NEC) members, including Gwede Mantashe, are lobbying for complete state ownership of the Reserve Bank demonstrates that the ANC is still completely out of touch with the key economic challenges in South Africa today.

One would think, with numerous parastatals in crisis, that the ANC would not continue with their mindless march to achieve an outdated ideological agenda that can only bring economic ruin. We simply cannot afford our Reserve Bank to become the scene of further economic crimes against the people of South Africa and the DA has no intention of letting this happen.

Our Constitution is very clear about the independence of the Reserve Bank, stating that it must perform its functions without fear, favour or prejudice in pursuit of its mandate. Mr. Zuma has also, in the past, pledged not to tamper with the independence of the Reserve Bank in any way at all. In October 2008, for instance, he stated that there was "no question of changing" the current setup. If the ANC NEC is now considering a u-turn, then we believe that such a move would be very poorly conceived and could constitute a significant threat to the stability of monetary policy.

It must also be noted that Mr. Mantashe's claim that the Bank is currently in "private hands" is extremely disingenuous. The fact is that government appointments hold a majority vote, and that private shareholders, with limited access to dividends, assist in holding the Board to account for its conduct. A classic case in point is the incident during Tito Mboweni's tenure as Governor, when a group of shareholders, unhappy with his management style, raised concerns over meeting procedures and transparency in decision making. To claim that private shareholders are somehow counteracting South Africa's economic development agenda is simply ridiculous.

We will be submitting parliamentary questions as soon as Parliament re-opens, and engaging with the department via the portfolio committee on finance, to establish the veracity of these latest reports on moves to influence the Reserve Bank's independence

Statement issued by Dion George, MP, Democratic Alliance shadow minister of finance, January 24 2010

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