Gigaba aide calls for nationalisation
An adviser to South Africa’s new finance minister advocated the state takeover of banks, mines and insurance companies in a newspaper editorial, two weeks after President Jacob Zuma’s ouster of Pravin Gordhan shocked investors and led to a debt downgrade. By Rene Vollgraaff.
An adviser to South Africa’s new finance minister advocated the state takeover of banks, mines and insurance companies in a newspaper editorial, two weeks after President Jacob Zuma’s ouster of Pravin Gordhan shocked investors and led to a debt downgrade.
In an opinion piece, titled “Our chance to complete the revolution” and published in the Sunday Times, Christopher Malikane, an economics professor at Johannesburg’s University of the Witwatersrand, also proposed the establishment of a state bank that would combine all government-owned financial institutions, the nationalisation of the South African Reserve Bank and the expropriation of land without compensation to the owners.
The Sunday Times said Malikane, who has advised trade union federation Cosatu, is an adviser to finance minister Malusi Gigaba, citing Gigaba’s spokesman Mayihlome Tshwete. Gigaba. who was appointed on 31 March, has pledged to avoid further debt downgrades, and said on 13 April that he urged Zuma to stick to previous budget plans and wants management continuity at the nation’s treasury.
Malikane in February wrote an opinion piece for Independent Media, which publishes 15 newspapers in South Africa, in which he disagreed with the ANC policy to transfer resources to citizens. He said: “The only sensible way in which the people as a whole can own these basic resources is through nationalisation carried out by a democratic state, which is the only institution that can justly claim to represent the will of the people.”
Gigaba and his deputy, Sfiso Buthelezi, who was also appointed on 31 March, have met with the CEOs of Standard Bank, Barclays Africa Group, Nedbank and FirstRand and assured them there would be no shift in policy, the Banking Association of South Africa said on 5 April.
Gordhan’s ouster as finance minister in a cabinet reshuffle led to S&P Global Ratings and Fitch Ratings cutting South Africa’s credit rating to sub-investment grade. Moody’s Investors Service has put its assessment of the nation’s debt, which is two levels above junk, on review for a downgrade on 3 April.
Tshwete, the finance minister’s spokesman, didn’t immediately respond to a phone call and text message seeking comment on Malikane’s appointment and role at the treasury. — (c) 2017 Bloomberg LP