Should the South African Reserve Bank be nationalised? Patrick Craven, Cosatu spokesman, and Lumkile Mondi, economist at the Industrial Development Corporation, face off.

Patrick Craven: Yes

Nationalise to eliminate capital influence

That the Reserve Bank is constitutionally independent doesn't mean shareholders can't attempt to influence its decisions behind the scenes. Nationalisation would take out that threat.

The private shareholders - who are industrialists and businesspeople - clearly have interests, and the temptation to influence interest rate decisions will always be there. If the ownership is no longer with them, they won't have as much influence as ordinary citizens. And Government can't officially influence the Bank's decisions.

Vesting Bank ownership with the State isn't the same as the State wanting to manipulate interest rate decisions. The Monetary Policy Committee must take into account what the majority of people want in setting interest rates. That can be done through observing the voting patterns of South Africans.

A nationalised Bank can remove the threat of private capital influencing its decisions, and it would be beholden to the people of SA, not just a few private shareholders. Nationalisation is the lesser of the two evils.

The difference between Government and the private shareholders is that Government is elected by the people of SA, who are mostly poor, whereas shareholders aren't elected but have control of the institution.

Nationalisation isn't a call against private capital but a call to make the Bank pro-people, making it representative of the people of SA. In transferring control to the State, Government would look into what the law allows as a procedure and pay incumbent shareholders accordingly.

Lumkile Mondi: No 

Trying to create another State-owned disaster?

Currently, the Reserve Bank may be owned by private shareholders but it's a South African institution accountable to all South Africans through Parliament. Its mandate comes from the elected National Treasury and is clearly articulated and its independence guaranteed by the Constitution.

The ownership issue only becomes relevant when it comes to the distribution of profits, which the bank doesn't do. There's nothing wrong with private capital engaging with the Bank, or any other institution in a constitutional democracy like ours. Public institutions are there to represent everyone, not just the poor or the rich. People can lobby and argue as long as it's done transparently.

There's also nothing to gain and more to lose as a country if the Bank is nationalised. Currently, Cosatu can gain everything it needs through its alliance with the ANC (which controls Treasury). If Cosatu wants to change Bank policy, it can use those channels at any time.

The debate about monetary policy is creating an environment of uncertainty in the markets. It must be sorted out once and for all. SA is dependent on foreign capital inflows to fund its fiscal and current account deficits and this never-ending debate doesn't help.

The State has a very poor record in managing public companies. Currently, around five such public corporations are leaderless. Nationalising the Bank would create much uncertainty, as the State can't efficiently manage its entities. And it would be chewing off much more than it can swallow. It would be trying to create another State-owned disaster, like those it can't manage.