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Reserve Bank nationalisation is 'a R200,000 debate' says its governor – to many empty chairs

Phillip de Wet , Business Insider SA
 Jul 26, 2019, 11:50 AM
  • Reserve Bank governor Lesetja Kganyago has a new favoured description of calls to nationalise the SARB: "a R200,000 debate".
  • That is the total maximum dividends payable to the private shareholders of the Reserve Bank.
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The ongoing wrangling about the nationalisation of the South African Reserve Bank (SARB) is about something that amounts to a non-issue, Reserve Bank governor Lesetja Kganyago told the Bank's annual general meeting on Friday.

"Put simply, the discussion about the nationalisation of the Reserve Bank is a R200,000 discussion," Kganyago said in a departure from his prepared remarks.

That is the total amount of money payable every year to private shareholders under rules that strictly limit dividends.

Kganyago used the same characterisation in a public lecture earlier in the week.

He was speaking to a group of just over 100 attendees at the meeting – of which just a quarter represented shareholders – in an auditorium that featured more empty chairs than full ones – despite the fact that Reserve Bank shares can be bought for R10 each, and a single share guarantees entry to the meeting.

Though he spent little time on the matter of nationalisation – which he described as "fuelled by perceptions that private shareholders have control over the central bank", Kganyago appeared a little testy about it, even in his formal remarks, pointing out that he has "on a number of occasions" tried to address such perceptions, and would reiterate again "what I have been saying repeatedly."

Private shareholders of the SARB has no say in monetary policy or the regulation of the financial sector, and elect directors to a board controlled by the President by his direct appointment of more than half the directors.

The SARB had chosen to celebrate the Bill of Rights and the Constitution that contains it through new coins in part because it defines the Reserve Bank's mandate of price stability, Kganyago said.

Asked if shareholders could meet with him to discussion nationalisation, Kganyago referred the issue to Parliament.

"We can’t nationalise ourselves," he said. 

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