South Africa nationalisation talk hurts investment – minister


A debate in the ruling African National Congress (ANC) over nationalisation of South Africa’s mines is damaging investment in the continent’s biggest economy, the minister of state-owned enterprises said yesterday.

Malusi Gigaba, who oversees state-owned companies such as power utility Eskom and freight logistics group Transnet, said the discussion was affecting investment not just in mining but other industries as well.
“We know the harm this acrimonious and reckless debate about nationalisation is doing to investments, to the good image of our country, affecting not just investments in mining, but investments generally,” Gigaba told the American Chamber of Commerce at a briefing in Johannesburg.

The ANC’s Youth League — led by Julius Malema — has been campaigning for nationalisation of mines by the world’s biggest producer of platinum and major supplier of gold.

Much of the political impetus behind Malema stems from the failure of post-apartheid affirmative action, or black economic empowerment, to spread wealth and control of the economy beyond the formerly ruling whites and a small black elite.

Malema’s rhetoric about nationalisation and seizure of white-owned farms without compensation has unsettled domestic and international investors, not least for its parallels to the disastrous policies of President Robert Mugabe in neighbouring Zimbabwe.

The South African government has said nationalisation is not its policy but that it would discuss the matter at a policy conference next year.

It has commissioned an external report which will look at the merits of nationalisation in South Africa. Gigaba said the report would come out by the end of this year.