National Treasury rejects attempts to reform and nationalise SARB

CAPE TOWN - National Treasury has rejected attempts to reform and nationalise the South African Reserve Bank (SARB), warning that it could lead to lawsuits by the bank’s foreign shareholders.

National Treasury made the submission during public hearings into Economic Freedom Fighters (EFF) leader Julius Malema's private member’s bill which calls for the nationalisation of the country's central bank.

But Malema's proposal has received support from at least one quarter, with labour federation, COSATU, agreeing that privately held shares in the bank must be expropriated by the state.

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The Malema-sponsored South African Reserve Bank Amendment Bill not only wants the minister to have more powers over the bank, but it also wants the two million privately held shares transferred to the state.

Christopher Axelson, National Treasury’s deputy director-general for tax and financial sector policy, said that nationalising the bank could create legal problems at an international level.

"And in those bilateral investment treaties, if they were to be expropriated, it would go against those bilateral investment treaties and those foreign investors could potentially take international legal recourse and would take South Africa to court."

Axelson said that while the bill does not change the mandate and independence of the reserve bank, there won’t be any comfort to current and future investors that this would not happen in the future.