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Assessing and promoting civil and minority rights in South Africa.

[Source: Bloomberg by Rene Vollgraaff & Prinesha Naidoo.]

Since its founding almost a century ago, South Africa’s central bank has been owned by private shareholders. Now President Cyril Ramaphosa is pushing ahead on a plan to nationalize the Reserve Bank in order to address its anomalous ownership structure and assert the nation’s sovereignty. Critics say the move could shake faith in an institution that’s been seen as being above politics and be the first step toward infringing on its inflation-fighting mandate.

1. Why change the bank ownership now?

The ruling African National Congress says it wants to bring the Reserve Bank in line with how most other central banks operate. Yet some see politics at work behind the move. At the same meeting where the party ratified plans to nationalize the central bank, it also pledged to change the constitution to make it easier to expropriate land without compensation. The ruling party’s manifesto released ahead of May 8 elections stating that the bank must pursue a flexible policy regime heightened fears that the ANC not only seeks to change the ownership structure, but will also try to prescribe policy decisions.

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South Africa at a Glance
57 700 000 (mid 2018 estimate)
4.5% y/y in March 2019 (CPI) & +6.2 y/y in March 2019 (PPI)
1.4% q/q (4th quarter of 2018)
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