The Congress of South African Trade Unions (COSATU) presented its submission on the South African Reserve Bank (SARB) Amendment Bill to Parliament’s Standing Committee: Finance.  The Bill provides for the state to be the sole shareholder in the SARB and to appoint its Directors.  COSATU supports the Bill as it seeks to align SARB’s ownership and leadership structures in line with international norms, including across the world’s leading industrial economies.

The SARB for a quirk of history allows for private shareholders.  This is an anomaly and makes no sense whatsoever.  The SARB is a creature of Constitutional and legislative design and should reflect this ethos.  We believe the Bill meets constitutional muster as it simply seeks to provide for the state to be the sole shareholder of this public institution. 

Treasury and the SARB need to provide a reasonable framework and options on how this could be effected, taking into account the processes and provisions stipulated by the Expropriation Act for matters of compensation.  This would need to take into account fiscal constraints and not to allow undue profiteering by shareholders seeking extravagant and unjust compensation.

There is a need for a broader debate on the role of the SARB in not only managing the value of the currency and protecting workers from the dangers of inflationary erosion of their wages, but also to play a much more aggressive and progressive role in stimulating economic growth, including utilising a lower repo rate to support this mandate.

This is a sensitive matter for society, workers, the economy and the state and needs to be handled with the necessary sobriety and common sense.  It should not be reduced to a matter of slogans or unhelpful fear mongering but rather approached in a manner that addresses this historical anomaly and ensures that SARB is strategically positioned to help support economic growth.

Issued by COSATU

Matthew Parks(COSATU Parliamentary Coordinator)

Mobile: 082 785 0687

Email: matthew@cosatu.org.za