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South Africa not to nationalize banks assures Finance Ministry

CAPE TOWN South Africa (Xinhua) -- The South African government will not nationalize banks as proposed by an adviser to Finance Minister Malusi Gigaba, the Finance Ministry said on Tuesday.

“The nationalization of banks is not government policy,” the ministry said in a statement.

Christopher Malikane, an adviser to Gigaba, advocated the state takeover of banks, mines and insurance companies in an editorial published by Sunday Times on April 16, two weeks after President Jacob Zuma ousted Finance Minister Pravin Gordhan in a cabinet reshuffle.

The reshuffle shocked investors and led international rating agencies Standard & Poor’s and Fitch to downgrade South Africa’s credit rating to junk status.

In an opinion piece titled “Our chance to complete the revolution,” 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 nationalization of the South African Reserve Bank and the expropriation of land without compensation to the owners.

“The Ministry of Finance would like to place on record that the opinion piece by advisor to the Minister of Finance, Professor Chris Malikane was written in his personal capacity as an academic and activist,” ministry spokesperson Mayihlome Tshwete said.

The views expressed in the opinion piece are not necessarily government policy, Tshwete added.

He said Malikane is within his rights as an academic and an activist to contribute ideas to national discourse on any subject.

Gigaba wishes to place on record that the work of the Ministry of Finance will continue to be guided by policies of the African National Congress (ANC), as articulated in conference resolutions and in the 2014 election manifesto, Tshwete said.

The Ministry of Finance remains committed to leveraging on all available policy tools—monetary, fiscal and structural—to achieving strong, sustainable, balanced and inclusive growth, according to Tshwete.

“Minister Gigaba calls on all sectors of South African society to work together and support the work that the Ministry of Finance is doing to avoid further downgrades and in the medium term, to restore our investment grade rating,” said the spokesperson.

Gigaba will this week hold meetings with foreign investors in Washington at the IMF and World Bank Spring meetings in this regard, Tshwete said.

Also on Tuesday, Gigaba briefed Deputy President Cyril Ramaphosa in Pretoria on his upcoming visit to Washington.

Ramaphosa said this was a continuous internal government briefings about what the finance minister is going to be doing.

“We are very very supportive of the Minister and his team as they are going to showcase South Africa to the world”, said Ramaphosa.



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