South Africa’s governing African National Congress plans to discuss expanding the central bank’s mandate to help deal with chronic unemployment and boost the inclusion of Black people in the financial sector, the party’s head of economic transformation said.
The ANC began a three-day conference on Friday to set its policy objectives for the next five years. Among the policies it will discuss is the progress made on a resolution the party set in 2017 calling for the nationalisation of the central bank, Mmamoloko Kubayi said in an interview with the state broadcaster.
“Delegates will also raise the issue of the mandate of the Reserve Bank, whether it needs to be taken into consideration, not only inflation targeting, but also looking at can we deal with the issues around unemployment and support the transformation of the financial sector,” Kubayi said. “We do believe that the inflation-targeting will have to remain. Whether we expand the mandate is something we will look at.”
The ANC decided in 2017 that the state should take ownership of the South African Reserve Bank, one of a handful of central banks globally that is owned by private investors, because it said the ownership structure infringed on the nation’s sovereignty. The shareholders have no say over monetary-policy decisions and the bank’s mandate — to ensure price stability — is set out in the constitution.
Africa’s most industrialised nation has battled to meaningfully include a larger portion of its population in mainstream finance, with few lower-income earners able to access loans from banks. That’s among factors that have maintained South Africa’s status as one of the world’s most unequal societies, a standing that stems from the system of White-minority rule that ended in 1994.
South Africa’s unemployment rate is 34.5% — the highest on a global list of 82 nations monitored by Bloomberg.