Monetary

This policy brief by the Institute for Economic Justice (IEJ) argues that South Africa's monetary policy is 'anti-developmental' because it prioritizes price stability and inflation targeting over growth and employment. The author contends that the South African Reserve Bank (SARB) relies on inappropriate tools, specifically interest rate manipulation, which discourages investment and contributes to de-industrialization and financialization. The brief proposes a fundamental shift toward a developmental monetary framework involving direct credit provision to productive sectors, the monetisation of fiscal operations, and closer coordination between the SARB and the National Treasury.

• The current monetary policy framework in South Africa is described as 'anti-developmental' and incompatible with creating an egalitarian society, contributing to chronic unemployment, poverty, inequality, and the financialization of the economy.
• The brief criticizes the use of inflation targeting and interest rates as the primary tools for monetary policy, arguing they are ineffective when inflation is not driven by domestic demand and that high interest rates lead to sluggish growth and discouraged investment.
• The author proposes 'Real Quantitative Monetary Easing' (QME), which involves the SARB providing credit directly to productive economic agents, such as SMMEs, in sectors pre-determined by the Department of Trade and Industry (DTI).
• To support job creation and infrastructure, the brief recommends the monetisation of debt (direct purchase of government bonds) or Overt Monetary Financing (OMF), where the reserve bank transfers money to fiscal authorities without creating debt.
• The document argues that the financial services sector in South Africa has reached 'alarming levels' at approximately 21% of GDP, which is more than double the ideal level of less than 10%, thereby draining resources from the real economy.
• The brief calls for a structural change in the SARB's mandate to prioritize growth and employment, the establishment of public banks to lend for productive purposes, and the abandonment of interest rate manipulation as the primary policy tool.

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} }