Monetary

The policy brief critiques the South African Reserve Bank's (SARB) focus on price stability, arguing that high interest rates and inflation targeting contribute to de-industrialisation and unemployment. It proposes replacing these tools with 'Real Quantitative Monetary Easing' (QME), the monetisation of debt, and Overt Monetary Financing (OMF) to support SMMEs and public infrastructure. The author advocates for a close working relationship between the SARB and National Treasury to de-financialise the economy and establish public banks to direct credit toward productive investment.

• South Africa's current monetary policy is described as 'wholly anti-developmental' because it prioritizes price stability and uses interest rates as the sole tool, which the author claims leads to sluggish growth, discouraged investment, and increased unemployment.
• The author proposes 'Real Quantitative Monetary Easing' (QME), which involves the SARB providing credit directly to productive economic agents, including non-customers of the Reserve Bank such as ordinary SMMEs, in sectors pre-determined by the Department of Trade and Industry (DTI).
• The document advocates for the 'monetisation of debt' (direct purchase of government bonds) and 'Overt Monetary Financing' (direct transfer of money to fiscal authorities for national development needs), citing China as a primary user of the latter to create jobs and reduce poverty.
• The financial services sector in South Africa is reported to be at approximately 21% of GDP, which the author considers an 'alarming' level of financialisation that drains resources from the real sector; an ideal level is suggested to be less than 10%.
• The brief recommends a fundamental change to the SARB's mandate to include growth and employment, the establishment of public banks to ensure equitable access to affordable credit, and the immediate lowering of interest rates.
• The author argues that the current separation between fiscal and monetary authorities is 'naïve' and costly, proposing instead a close cooperation similar to the relationship between the Bank of England and Her Majesty’s Treasury.

APA

Nkosi, R. (2018). Monetary. Institute for Economic Justice. https://iej.org.za/wp-content/uploads/2020/07/Stream-2-Policy-Brief-4a-Monetary-1.pdf

Chicago

Nkosi, Redge. Monetary. Institute for Economic Justice, 2018. https://iej.org.za/wp-content/uploads/2020/07/Stream-2-Policy-Brief-4a-Monetary-1.pdf.

Wikipedia

{{cite report |last1=Nkosi |first1=Redge |title=Monetary |publisher=Institute for Economic Justice |date=August 2018 |url=https://iej.org.za/wp-content/uploads/2020/07/Stream-2-Policy-Brief-4a-Monetary-1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{nkosi2018monetary, author = {Nkosi, Redge}, title = {{Monetary}}, institution = {Institute for Economic Justice}, year = {2018}, month = aug, url = {https://iej.org.za/wp-content/uploads/2020/07/Stream-2-Policy-Brief-4a-Monetary-1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }