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Why the Zuma faction of the ANC wants to nationalise the reserve bank

According to The Citizen analysts have said that the ANC’s fight over whether to nationalise the reserve bank is pointless, considering that the bank would still have to obey its constitutional mandate.

Even talking about the issue is really just making investors nervous, with no real gain in sight.

So far as the analysts are concerned it is a factional battle within the ANC, with the Jacob Zuma aligned radical economic transformation faction wanting to show their dominance, as the Cyril Ramaphosa aligned moderates want to water down the radical policies adopted at Nasrec.

My Take

There is actually a point to nationalising the reserve bank, and it is one of the major reasons we should not vote for the ANC and the EFF.

What happens with interest rates is pretty much what is going to happen with interest rates. The bank’s mandate on that is set by the constitution – what you’d need to do to change that is to change the constitution not who owns the bank.

But the interest rate isn’t all that the reserve bank does. The reserve bank also is in charge of things like banking licenses.

Why would this matter to the Zuma faction within the ANC? Well, when the Gupta family lost their ability to bank in South Africa because none of the banks wanted to take the risk involved, Mosebenzi Zwane threatened their banking licenses.

He said they should remember who grants their licences, which they did – it is the reserve bank which is independent, not Zwane, who just had a big mouth.

Imagine if he had power to make good on his threats. We talk about the tragedy of VBS, and how people lost their life savings.

Now imagine if VBS was one of the big four, imagine it was Nedbank.

Not only would a big chunk of South Africa’s population lose their savings, but all of those businesses banking with Nedbank would lose their ability to pay their creditors and their staff.

Even just the threat of this could cause a run on the banks, because would you want to keep your money in a bank which could lose its license for refusing to engage in corrupt dealings?

What you’ve got to bear in mind with the ANC as a party, is that their corruption is to a large extent rooted in their incompetence. It isn’t simply a matter of malice, they genuinely do not realise the harm that they’re doing.

This is a big part of why I want our government to be secular, because part of secularism is accepting our consequences are often born of our actions. It isn’t some curse from some God or angry ancestors that has afflicted our country but the consequences of specific actions taken by specific individuals.

Consider how much has been stolen over the years, and consider how much could have been done with that money if it was properly managed.

Black business would be booming because of the increased access to finance, our education system would be amongst the best in the world, with well paid professional teachers in gleaming schools, we could have quality free national healthcare without even having to talk about a National Health Insurance to fund it because that money would already be there, not sitting in some bank account in Dubai.

Rather than being Africa’s leading research nation, we could be amongst the top research nations in the world, providing many of the same economic advantages that the US and China enjoy from their leading positions today.

Our problem has never been a shortage of money, we are not a poor country, we’re a middle class country, yet we are forced to live poor because our money is in the hands of crooks.

And those crooks have never been good at seeing the links between their actions and their consequences, so there is no limit to how much damage they can do in their quest for that fancy watch or that fancy car.

This is also why despite all I have to say slamming our government, I still feel like South Africa could turn the corner relatively quickly if we ever managed to do something about the corruption problem.

It wouldn’t be easy, but if you consider the staggering amounts being stolen and mismanaged, the money is there to do it.

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