ONE OF THE MAIN
REASONS A RESERVE
B A N K M AY B E B E
P R I V AT E LY O W N E D
I S T O TA K E S O M E
PRESSURE OFF OF
THE GOVERNMENT…
government. As things are, the SARB has a board
of directors consisting of 14 people where half of
the members are appointed by the President and
ordinarily includes a governor and three deputy
governors who are full-time executive members
along with three part-time directors - reinforcing
their influence in running the SARB. Along with
this, the government has de facto control through
debt funding.
Patrick Craven, Spokesperson for COSATU
is quoted as saying, “Kganyago (the newly
appointed chairman) must insist that the SARB be
nationalised. “
Being one of the few privately owned government
organisations in the world, Craven insists, “it
is totally unacceptable that such an important
institution should be privately owned and
answerable to shareholders rather than to the
government elected by the people of South Africa.”
With all this in mind, according to Section 31
of the SARB Act, the governor of the SARB must
submit annual reports to the Minister of Finance
along with relaying any and all information
regarding monetary policy. This brings us back
to accountability and how the government
still has some influence over how the SARB is
run. Meaning Craven’s disagreement with the
regulation is a moot point.
One of the main reasons a Reserve Bank may be
be privately owned is to take some pressure off of
the government when it comes to maintaining a
stable economy. While this isn’t an ideal situation,
certain countries have to deal with a plethora of
problems outside the realm of economics.
As a matter of national interest, logically, this
should indeed be considered unacceptable.
Yet the benefits of having a privately owned,
government run institute appears to be about the
alleviation of various concerns. And with South
Africa being a relatively young Democracy, we
can all agree the government could do with some
help in order to keep the economy operating at a
satisfactory level.
By Frederik Ferreira
63
IMBO/ ISSUE 31/ '14