South Africa Shelves Plan to Establish Sovereign Fund

South Africa’s government has shelved plans to set up a sovereign wealth fund to manage the country’s foreign reserves and currency because of declining metal prices.

“The creation of a sovereign wealth fund is best timed with stable or rising commodity prices,” Economic Development Minister Ebrahim Patel said in a written reply to a parliamentary question published on his ministry’s website today. “In light of current market conditions, no immediate steps are contemplated.”

The ministry proposed the fund in 2010 as part of its New Growth Path, a development plan that called for steps to prevent the rand from being uncompetitive and for the fund to manage foreign reserves “more actively.”

The rand has dropped 11 percent in the past year, while gold has slumped 15 percent and platinum has declined 1.2 percent. South Africa is the world’s largest producer of platinum. Metals and other commodities accounted for 53 percent of South Africa’s exports in 2012, according to government data.

To contact the reporter on this story: Mike Cohen in Cape Town at

To contact the editor responsible for this story: Nasreen Seria at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.