Of late, a dangerous idea is resurfacing in South Africa. Like a whale that circumvents the globe only to pop its head out in the waters of Cape Town every couple of years, the idea of nationalising the South African Reserve Bank just does not want to go away. Spearheaded by Julius Malema and the Economic Freedom Fighters (EFF), the South African Reserve Bank Amendment Bill (B26–2018) proposes to strip the Reserve Bank of its independence, concentrating control in the hands of the state — specifically, the executive branch and the minister of Finance.
For Malema and those who agree with his vision, this step will liberate the banking sector, and speeden up the process to his understanding of economic equality. At this point it is hard not to remember Edmund Burke’s comments on equality: “Such is the event of all compulsory equalizations. They pull down what is above. They never raise what is below: and they depress high and low together beneath the level of what was originally the lowest.”
What Malema refuses to acknowledge, is that very few, if any, of his proposals are original. Nationalising the central bank has been tried many times, it is a path already taken by countries that now serve as cautionary tales. For the sake of example, I will focus on Zimbabwe, Venezuela, and Argentina to illustrate how attempts to consolidate central bank control under their political leaders has had devastating effects in very recent times. The consequences for all three economies, and in fact for all three nations were uniformly catastrophic: hyperinflation, economic collapse, humanitarian crises, and the destruction of public trust in institutions.
Zimbabwe: Printing Poverty
In Zimbabwe’s case, the mistake took place long before the collapse came. The Reserve Bank of Rhodesia (established in 1964 after the breakup of the Federation of Rhodesia and Nyasaland) operated under the control of the colonial and later minority white-led government of Rhodesia. By never creating distance between the government and the central bank, anyone who got to power would ex officio inherit the ability to influence the economy through executive power. In the early 2000s, Zimbabwe’s ruling party ZANU–PF, under President Robert Mugabe, began to exert overwhelming influence over the Reserve Bank of Zimbabwe (RBZ). Even though the bank was always formally state-owned, it had traditionally operated with some degree of professional and technocratic independence.
That ended in 2004, with the appointment of Gideon Gono as central bank governor. Gono was a close Mugabe ally, and under his leadership the RBZ became a de facto political tool. At Mugabe’s direction, the central bank began printing money to fund the government’s budget shortfalls, pay public workers, finance failed agricultural subsidies, and cover massive corruption-linked expenditures.
By 2008, Zimbabwe descended into full-blown hyperinflation, peaking at an unimaginable 89.7 sextillion percent. Prices doubled every 24 hours. The Zimbabwean dollar collapsed and was ultimately abandoned. Entire life savings were wiped out overnight. A once-thriving agricultural economy was left in ruins, unemployment soared past 90%, and citizens resorted to bartering or using foreign currency to survive. Zimstat, the National Statistics Agency of Zimbabwe, estimated in a 2009 report that 1,5 million of its citizens, nearly 10% of their population, had emigrated to South Africa – a number viewed as humble by some.
Mugabe had justified the seizure of the central bank under the rhetoric of “economic justice” and “anti-colonial transformation.” But in truth, this act fatally damaged one of the few institutions that could have saved Zimbabwe from collapse, and slowed its recovery from that collapse down from years to decades.
Venezuela: Revolution to Ruin
In Venezuela, Hugo Chávez and later Nicolás Maduro offered another vivid example of how nationalizing and politicizing a central bank can dismantle an economy.
Before Hugo Chávez rose to power in 1999, Venezuela was one of Latin America’s wealthiest and most stable countries, largely due to its vast oil reserves. Throughout much of the 20th century—particularly in the 1950s through the 1970s—Venezuela enjoyed sustained economic growth and attracted migrants from Europe and neighboring countries. By the 1970s, it had the highest GDP per capita in Latin America and was considered a model of prosperity. The country’s national oil company, PDVSA, was well-regarded internationally, and oil exports funded major infrastructure, education, and health projects. Caracas, the capital, boasted modern architecture and a strong middle class.
The Central Bank of Venezuela (BCV) initially had a constitutional mandate of independence. But starting in 2005, Chávez forced the central bank to transfer international reserves directly to the executive, bypassing the legislature. In 2010, a new law effectively stripped the BCV of its autonomy, allowing the government to directly print money to finance public spending.
What followed was one of the worst economic collapses in modern history. Hyperinflation became entrenched by 2016, with inflation hitting over 1,000,000% by 2018. The national currency became so worthless that people used it to make handicrafts. Food, fuel, and medicine shortages became common.
An estimated 7 million Venezuelans fled the country.
What began as a “socialist revolution” quickly turned into a textbook case of how economic populism, when combined with institutional overreach, can devastate a nation. Once again, central bank independence had been sacrificed on the altar of executive power.
Argentina: A Cycle of Crisis
Unlike Zimbabwe or Venezuela, Argentina’s crises have occurred in waves — but the erosion of central bank independence has been a recurring cause.
Under Cristina Fernández de Kirchner, who led a populist Peronist government between 2007 and 2015, Argentina passed Law 26.739 (BO 29.32012) in 2012, which removed the autonomy of the central bank. The words it used were not direct or blunt, didn’t sound socialist or stalinist, in fact, they seemed loving and kind:
The bank’s purpose is to promote, to the extent of its powers and within the framework of the policies established by the national government, monetary stability, financial stability, employment and economic development with social equity.
Upon reading it, one is tempted to ask: Well what is wrong with this? The proviso “employment and economic development with social equity” can very easily be interpreted in such a way that it supersedes the traditional aims of a central bank: Monetary and Financial stability. And this is exactly what happened. This 2012 Law allowed the government to compel the Central Bank of Argentina (BCRA) to finance budget deficits by printing money.
The result was predictable: chronic double-digit inflation, periodic currency devaluations, and capital flight. By 2014, inflation was above 30%. In 2018 and 2020, Argentina defaulted on its sovereign debt again. The Argentine peso depreciated to a fraction of its former value, and trust in government financial policy plummeted to such an extent that a guy who calls himself “the Lion” and parades through Buenos Aires with a chainsaw in his hand is deemed the more logical option.
The South African Context: A Grave Warning
It is not fearmongering to say that Julius Malema is attempting to steer South Africa down the same perilous road. In a time of AI and Fake News it has become very easy to break down an argument by breaking down character, and in the case of the Rand and in the case of our economy, a mature conversation that seeks to convince will always be superior to an immature one which divides and insults. Serving this purpose, I will explain Malema’s goals by inserting screenshots from the Bill currently open for public comment.
The proposed changes are the embodiment of the idea to transfer control of the Reserve Bank to the executive branch, removing critical checks and balances. It eliminates shareholder oversight, bypasses independent auditing, and gives the Minister near-total discretion in how the Reserve Bank is governed. The political rhetoric coming from Malema and his supporters is similar to that heard throughout socialist history, but factual and economic history is clear: central bank independence is not a colonial artifact — it is a safeguard. It exists to prevent exactly the kind of inflationary abuse and fiscal recklessness that occurs when politicians use the printing press as a piggy bank.
This is really not a drill
South Africans cannot afford to sleepwalk into an economic disaster. We must call out this bill for what it is: a political maneuver that threatens to undermine the very foundations of our financial system.
The Reserve Bank must remain independent — not because it serves elites, but because it protects the public from reckless political interference. When that independence is lost, inflation follows. Savings are eroded. Unemployment rises. Poverty deepens. We have seen this before. In Zimbabwe, people lost everything. In Venezuela, families fled by the millions. In Argentina, economic credibility was destroyed.
Malema’s bill repeats the same mistakes. It gives excessive power to the executive and removes accountability. While it is cloaked in the language of transformation, its real effect would be to strip South Africa of one of its most trusted institutions.
Conclusion: A Voice of Caution
The South African Reserve Bank Amendment Bill is not just another political proposal. It is a direct threat to the economic health of our nation. We must learn from the past — from Zimbabwe’s collapse, from Venezuela’s tragedy, from Argentina’s turmoil.
Central bank independence is not a luxury. It is a necessity.
If we want to preserve the value of our currency, protect our savings, and ensure economic stability, we must reject the idea that politicians should control the money supply. This can be done through Free SA’s Public Participation Platform before 30 June 2025.
Let history guide us. Let our voices be heard. And let us protect the South African Reserve Bank from those who would turn it into a political instrument of ruin.
