FMF urges sweeping reform of monetary policy to revive South Africa’s economy

26 November 2024

The Free Market Foundation (FMF) has called on South Africa’s Government of National Unity (GNU) to urgently adopt a broad agenda of sound money reforms to reverse decades of economic decline and to restore prosperity.

This follows the release of its latest policy paper, “Liberty First: Sound Money”, authored by FMF Chief Executive Officer David Ansara, where the FMF lays out practical, actionable solutions to stabilise the currency, curb inflation, and safeguard the independence of the South African Reserve Bank (SARB).

“South Africa faces unprecedented economic challenges, including soaring unemployment rates, persistent inflation, and stagnant GDP growth. This paper shows how adopting sound money principles is critical to reversing this decline,” Ansara said.

Key recommendations in the policy paper include:

- Reduce inflation: By lowering the SARB’s inflation target to a range of 0–3%,

- Strengthen SARB independence: By amending the Reserve Bank Act to reinforce institutional autonomy and prevent political interference.

- Explore Bitcoin as a reserve asset: By establishing a strategic Bitcoin reserve through the SARB and National Treasury to diversify national assets and embrace cutting-edge monetary technology.

- Protect vulnerable citizens: By addressing the disproportionate impact of inflation on South Africa’s poorest communities and prioritising price stability.

This latest policy paper is the final instalment in the FMF’s Liberty First series which was designed to equip policymakers with actionable strategies to restore economic freedom and to create growth and prosperity.

“Inspired by the Economic Freedom of the World (EFW) annual report, the ‘Liberty First’ series underscores that free-market policies not only drive growth but improve social outcomes for all citizens,” Ansara explained.

“These measures are essential for rebuilding economic freedom and fostering long-term growth. We therefore urge the GNU to act decisively by adopting and implementing a wide variety of pro-freedom and pro-growth policy recommendations,” Ansara concluded.

Issued by David Ansara, Chief Executive Officer, IRR, 26 November 2024