There was a debate in the National Assembly last week on a Member’s Bill about the nationalisation of the SA Reserve Bank (SARB).
The debate was at the behest of the president of the EFF, Julius Malema. Some argue the debate for nationalisation of the bank is much to do about nothing. In fact, they argue such a matter is inconsequential because the shares and share price is so small. The question begged and unanswered is: If the stake for ownership is so inconsequential, why do those who own it for such a pittance hold it so tight for dear life?
In fact, it is this hidden and unspoken response to its ownership over which light is to be shed. But more fundamentally is that the bank has as its shareholders foreign nationals, and that goes as far as saying that the bank is wholly owned by those foreigners. Be that as it may, perhaps the most important point would be: How many South African blacks are among the 830 shareholders who own the bank?
This statistic is important if South Africa and an SARB of the future is to be considered in the debate. While skills count – and against a backdrop of skilled blacks accounting for a mere 18% on average against their skilled white counterparts, at 55% – it may be improbable if skill were to be a criterion to excavate the required and willing blacks to take on the task.
But if there are 830 SARB shareholders, there is no doubt that the ownership by blacks proportional to the population is possible. It would be a serious travesty if blacks do not, at best constitute 93% of the ownership of the bank, according to proportionality of the black population, and at worst it should be 60% owned by blacks, if we attenuate to a relaxed standard.
An institution of that significance, whose mandate can change lives, should of necessity be owned by the majority whose lives are precarious and require attention. It cannot be left in the hands of those who have no economic, cultural, geographic, political and social ties with the majority population.
This argument, however, can be scuppered by the recent experience of collapsing the Venda Building Society (VBS) bank. This was a bank built on trust with wholly black ownership for black lives, who were predominantly women.
But it was looted by blacks without any empathy for the generational value that was created by those who needed help the most. These corrupt individuals put their children through school and funded their businesses through theft. But similar questions can be raised against Steinhoff, which saw Markus Jooste’s greed shock the country and eventually led to him taking his own life.
Having raised this concern, the question in relation to the SARB still remains: Why those who own it, or their proxies, are so adamant against relinquishing the ownership to the minister of finance? A five-cent dividend, voting for seven members and attending an annual general meeting – is that all there is to it? No, it cannot be.
Dr Dumisani Jantjie, director of the Parliamentary Budget Office, touched on the real issue, which sent Democratic Alliance MP Jannie Rossouw into a spin. Jantjie pointed to the developmental role of the SARB, which to date has been confined only to inflation and not even its flip side, employment. The SARB’s mandate is supposed to be developmental and not just regulatory. This is what is at stake. It must intervene in development.
The memory lane of Covid-19 will remind those who survived the Covid effects of memory loss that then minister of finance, Tito Mboweni, declared he had availed R 200 billion for intervention as business rescue at the height of the pandemic.
Commercial banks had to dispense this amount and the government provided the collateral. The SARB had to usher this liquidity to commercial banks. Did it happen? No, it did not. The canary-like cry from Minister Khumbudzo Ntshavheni, who said at the time that not only was the money not availed, but only white business benefited from less than 10% of the fund. As for the blacks, there was nothing.
The banks on the other hand said they feared breaking the banking laws, that the SARB holds against their heads, of handing over unsecured loans.
What does this tell you. A circus of the high table tells us that not the minister of finance, nor the Cabinet, including the President, can remove the fear of God from the commercial banks about the Sword of Damocles the SARB holds over development finance. They listened to their fear – or perhaps the SARB told the commercial banks to not allow the barbarians to come to the gates.
The essence of Jantjie’s intervention sharpened the focus of the role of the Reserve Bank as an agent of development in the state and will be bound to open the gates when the barbarians come. For that to happen, the SARB cannot continue to enjoy this anomaly. And worst still, it cannot belong to a bunch of foreigners, who through their exercise of long handle, stick sticks in their ears and fail to listen to a minister of finance who, by the way, was a governor of the SARB before.
Ntshaveni had to sing a solo soprano that faded into oblivion. Malema is, therefore, correct in bringing the ownership of the SARB into focus, but more than that, Jantjie pointed to the anomaly of this ownership. Ntshaveni received the silence of her colleagues and as is usual, that silence is not consent, it is to let sleeping dogs lie.
Malema has put turpentine on the backside of the dog and it can no longer sleep. While the minister with the shortest stint as a finance minister augmented the turpentine to get the dog to seek a new home, the minister of finance will be the new owner. And, perhaps, it will not be a weekend special for him, but he possibly could be that finance minister in this the second coming of Jesus in a different attire of MK and not ANC.
Dr Pali Lehohla is a Professor of Practice at the University of Johannesburg, a Research Associate at Oxford University, a board member of Institute for Economic Justice at Wits and a distinguished Alumni of the University of Ghana. He is the former Statistician-General of South Africa.
BUSINESS REPORT