After President Cyril Ramaphosa said on Thursday that the government intends to continue with plans to nationalise the Reserve Bank, the Rand took a serious knock.
The ANC passed a resolution at its Nasrec conference in 2017 to make the bank 100% state-owned.
Political analyst Sanusha Naidu, in conversation with Jeremy van Wyk, remarks that this is a debate that's come along from 1994 and before.
It's been an interesting debate that goes way back to '94, pre-'94, around the structure of the economy and the role of the financial sector. If you go back and look at the negotiations at Codesa 1, Codesa 2 there's always been this interesting dynamic that emerged around what kind of economic formula should be the best approach for South Africa.— Sanusha Naidu, Political analyst
Naidu points out however, that President Ramaphosa's statement comes ahead of the upcoming May elections but maintains that he is not being reckless.
We're in an election year and we have less than two months to go for this election. Of course some people may argue it's about election posturing to talk to the different constituencies both within the party and outside the party to say, I'm not not neglecting this area, it's an important discussion to have.— Sanusha Naidu, Political analyst
On the other hand... I would like to think he's not completely reckless in making those statements, because President Ramaphosa does understand the dynamics of the way the global economy works. No matter what happens you can't insulate yourself from the fact that any statement of that magnitude will effectively impact the economy.— Sanusha Naidu, Political analyst
Aside from addressing a party mandate, she says, President Ramaphosa's statement on nationalising the Reserve Bank is also a message to the rest of the world.
At the same time, also saying to the rest of the world, we are going to be looking at some of these issues because the world over there's this tension between governments and their reserve bank.— Sanusha Naidu, Political analyst
Click on the link below to hear the full conversation:
This article first appeared on CapeTalk : Why the state is 'revisiting' the idea of nationalising the Reserve Bank