DA calls on Ramaphosa to shut down debate on reserve bank nationalisation

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DA calls on Ramaphosa to shut down debate on reserve bank nationalisation

South Africa’s President Cyril Ramaphosa congratulates newly appointed Finance Minister Tito Mboweni in Cape Town, South Africa, October 9, 2018. REUTERS/Sumaya Hisham

The official opposition says the president is ‘kneeling to populists in his party’ by allowing the debate to take place.

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The Democratic Alliance (DA) has waded into the African National Congress’s (ANC) internal debate on the nationalisation of the South African Reserve Bank.

“The ANC’s internecine battle over the nationalisation of the SARB is economically destructive, alienating to investors, and does nothing to solve South Africa’s current crises,” said MP Geordin Hill-Lewis.

There is some confusion about the ANC’s policy on nationalising the SARB, with ANC secretary-general Ace Magashule accused of slipping two sentences into the party’s latest manifesto in January last year saying this would take place.

Following a national executive council (NEC) meeting, a statement from the ANC which indicated that the party would move towards nationalisation was met with public contradictions from both Finance Minister Tito Mboweni and President Cyril Ramaphosa.

The war within the party over this issue is largely seen as a factional battle between the radical economic transformation camp (RET), of which Magashule and others loyal to former president Jacob Zuma are members, and the more moderate camp loyal to Ramaphosa.

At the time of the confusion surrounding the issue, political analyst Ralph Mathekga told The Citizen that ANC radicals were mainly pushing for nationalisation in a bid to show dominance over moderates within the party who were opposed to the idea.

The DA believes there’s more to it than that, with a tweet from its official account saying nationalisation “would allow ANC to up political pressure with the aim of exerting influence over monetary policy and over commercial bank licensing/regulation”.

“The real agenda has little to do with development and everything to do with extending ANC control over all resource levers.”
According to Hill-Lewis, the whole debate should be shut down.

“There should be no debate about the nationalisation of the Reserve Bank. The Democratic Alliance’s (DA) call to the ANC is to leave the Reserve Bank alone, and instead focus on any number of economic crises which are a direct result of bad government policy,” said Hill-Lewis.

READ MORE: ANC calls Mboweni to order following SARB nationalisation tweets
“The proposal to nationalise the Reserve Bank is based on economic lunacy. It will bring no benefit, and only increased hardship, to South Africa.”

He added that Ramaphosa should shut the debate down as a show of strength.

“If President Ramaphosa has any desire to prove he actually leads his own government, he should end this discussion immediately by reinforcing the independence of the Reserve Bank. Instead, he is kneeling to populists in his party and allowing this debate to continue.”

The statement calls on the ANC to listen to Mboweni, who recently again showed opposition to the ANC resolution calling for SARB nationalisation. In a series of tweets, the minister argued the ANC has adopted the “wrong resolution”, questioned the reasoning behind it and called for the matter to be debated publicly.

In response, the ANC issued a statement saying the “wisdom” of resolutions of the NEC should not be questioned, and called on him to stop engaging in “public spats”.

The DA said Mboweni was correct that “the nationalisation of the Reserve Bank is a bad idea, and should never be pursued”.
“While the conditions for South Africa’s economic collapse accelerate, the ANC would do well to listen to its Minister of Finance on this catastrophic move for our ailing economy. This would also ensure the ANC provides less mixed messaging and more concrete plans for South Africa’s economic prosperity,” Hill-Lewis said.

(Compiled by Daniel Friedman)

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