This article was first published by Business Brief on 4 November 2024
South Africans should be terrified by the continued discussion of the possible nationalisation of the South African Reserve Bank (SARB). While the Economic Freedom Fighters (EFF) welcome the discussion, and support putting the institution under total control of government, rational individuals should be supporting more independence and autonomy for the SARB, not less.
The nationalisation of the SARB will further enable the deployment of ideologically motivated, and corrupt individuals to the crucial central bank. Such a move will endanger the efficacy of our currency and enable economic illiterate individuals to use the SARB to corrupt monetary policy.
This could be used for the mass printing of currency to fund government projects; a move that caused hyperinflation in Venezuela, Zimbabwe and pre-WW2 Germany. This will devalue the savings and money of all South Africans, resulting in the rand becoming functionally worthless – as has been the case with the Zimbabwean dollar.
Keeping the SARB independent is as important as keeping the judiciary independent. The government cannot be allowed to interfere with the currency of the country. There is far too much temptation to do so, as manipulating monetary policy can provide short-term solutions to many problems, while causing disastrous consequences down the line. In a country as corrupt as South Africa, government control of the Reserve Bank could result in direct theft of manufactured currency – a doomsday scenario for our economy.
Further, the independence of the SARB is necessary for it to serve its function as a defender of our monetary independence as a country. The purpose of a central bank is to defend the value, integrity and autonomy of a national currency. Monetary policy is a constant struggle against global factors, where a central bank must balance free market forces with possible foreign manipulation to ensure that South Africans can trust their currency and thrive.
The South African government has an incredibly perverse relationship with dangerous foreign powers like China, Russia and Iran. Already, these countries have manipulated South African foreign policy and inspired much of the worst aspects of our domestic policies.
If the SARB was nationalised, corrupt politicians receiving bribes from Beijing or the Kremlin could manipulate the rand to benefit Chinese dumpers, or Russians seeking to stem the collapse of the rouble.
Combine this with the lunatic plan of establishing a centralised BRICS currency, which could be used by foreign countries to manipulate our local economy against us, and we can see how important it is that the SARB is run independently.
Rather than nationalising the SARB it should become even more independent. Government control over the Reserve Bank should be minimised, with its functions becoming as internally autonomous as possible. Like the judiciary, the SARB should be internally appointed and monitored by a multitude of private watchdogs and regulators.
As it stands, the SARB stands between defending the existence of the rand as a functional currency, and complete collapse of the economy. The EFF, factions of the ANC, and other fanatical pundits would rather see the country burn, as long as it means the implementation of their braindead policies.
As much as we can, we must ensure that the SARB is never nationalised. This is an issue of tantamount importance to all South Africans, and a policy on which we must never waver.
