The Institute for Economic Justice (IEJ) has submitted written comments on the South African Reserve Bank (SARB) Amendment Bill [B26–2018]. While supporting the move to make the State the sole shareholder, the IEJ stresses that ownership changes alone will not address the Bank’s shortcomings in achieving balanced and sustainable economic growth.
SARB independence
The IEJ clarifies that central bank independence relates to policy goals and instruments, not ownership. Globally, most central banks are state-owned while retaining some independence. Thus, shifting shares to the State will not automatically compromise or strengthen SARB independence. More comprehensive reforms are needed to ensure coherence between monetary policy and national development objectives.
Mandate and coordination
The IEJ argues that SARB’s narrow focus on inflation targeting has hindered job creation, industrialisation, and green transformation. The Bank should align its actions with broader constitutional obligations for balanced growth, and work more closely with National Treasury to support government’s socioeconomic agenda.
Recommendations
The IEJ’s key proposals include:
- Support for State ownership of the SARB and Ministerial appointment of directors.
- A broader review of the SARB Act to:
- Expand the Bank’s mandate to prioritise employment, reducing poverty and inequality, and driving a just transition to a low-carbon economy.
- Improve coordination between SARB and the Executive, including through a new independent economic commission representing government, unions, civil society, and business.
- Remove restrictions on SARB financing tools to allow greater support for public banks and developmental financing.
Conclusion
The IEJ welcomes the proposed amendments but calls for deeper reforms to ensure the SARB becomes an engine for inclusive and sustainable growth, rather than a narrow guardian of price stability.