OPINION - Both the EFF and certain members of the ANC propose to nationalise the SA Reserve Bank (Sarb) so as to widen its mandate and advance the interests of the poor.
To use the Reserve Bank as a hyperinflating printing machine and to lower interest rates which will be inflationary makes no sense. That's what Robert Mugabe did. One can't print wealth; one can only create wealth by improving infrastructure, property rights, policing, establishing a stable electricity supply, education, skills, entrepreneurship, productivity, innovation and increasing growth.
The rich can afford to hold American dollars; the poor can't. The poor can only barter and bartering is costly. For example, they pay their school fees with a sheep. But where will the school keep the sheep and other commodities? And will the teachers’ salaries be paid in sheep and other goods?
Also, the wages of the poor do not keep up with inflation, thus they lose again. And the savings of the poor are normally destroyed by inflation, whereas the wealth of the rich represented by property and shares normally surpasses inflation. Thus hyperinflation actually redistributes wealth from the poor to the rich, the opposite of what was intended. And many companies in Zimbabwe are closing down because they cannot operate without a stable currency. Again, the workers lose. So nationalising the Sarb and turning it into a printing machine of the government will not assist the poor; it will actually impoverish them.