Treasury puts out fires on Gigaba aide's take on nationalisation

Cape Town – National Treasury tried to put out fires on Tuesday after Finance Minister Malusi Gigaba’s newly appointed advisor published an article over the weekend advocating for, among other things, the nationalisation of banks.

“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,” National Treasury said in a statement.

In an opinion piece published in the Sunday Times, Malikane said he was in favour of government taking over the banks, mines and insurance companies.

In the article, titled, “Our chance to complete the revolution,” Malikane, an economics professor at the University of the Witswatersrand, also proposed the establishment of a state bank that would combine all government-owned financial institutions, the nationalisation of the SA Reserve Bank (SARB) and the expropriation of land without compensation.

READ: Aide to Gigaba advocates nationalisations 

National Treasury said in its statement the views expressed in the opinion piece are not necessarily government policy. “Professor Malikane is within his rights as an academic and an activist to contribute ideas to national discourse on any subject.

“Minister Malusi Gigaba wishes to place on record that the work of the Ministry of Finance will continue to be guided by policies of the ANC, as articulated in conference resolutions and in the 2014 election manifesto.”

National Treasury stressed that the nationalisation of banks as advocated by Malikane is not government policy.

Malikane told Fin24 recently that there are "certain entities of the economy" which are supposed to be democratically owned by all people and the Reserve Bank, which is the “apex of the financial system”, should be one of them. 

READ: Why the SARB should be nationalised - analyst

National Treasury however pointed out that the Ministry of Finance remains committed to leverage on all available policy tools – monetary, fiscal and structural – to achieving strong, sustainable, balanced and inclusive growth.

Gigaba on Thursday held a question-and-answer session with local investors to reassure them of continuity and government’s commitment to reverse the recent sovereign credit rating downgrades.

READ: Gigaba assures investors govt won't spend money it doesn't have 

In the statement, he repeated these sentiments, calling 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.

“Minister Gigaba will this week hold meetings with foreign investors in Washington at the IMF and World Bank Spring meetings in this regard.”

David Maynier, Democratic Alliance shadow minister of finance, said in a statement Gigaba seems to be in "damage control", following the appointment of Malikane as economic advisor. 

"The fact that the minister is in damage control mode is proof enough that Professor Chris Malikane should never have been plucked out of the seminar room, where his mad ideas could do no damage to the economy, and appointed as an economic advisor, where his mad ideas can do damage to the economy," Maynier said. 

Maynier added that Malikane's appointment would "no doubt send a chill up most international investors’ spines" and will ensure a hostile reception during the international investor roadshow in the United States.

Finance Minister Malusi Gigaba briefs Deputy President Cyril Ramaphosa ahead of his visit to the US for the IMF World Bank Spring meeting and his meetings with the rating agencies at the Deputy President's official residence in Pretoria. (Photo: GCIS)

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