South Africa’s ANC Youth League Cheers Malema’s Call to Nationalize Banks
Julius Malema, the youth leader of South Africa’s ruling party, yesterday stepped up demands for the nationalization of mines and banks, triggering cheers from more than 5,000 delegates at a conference.
The government needs to take control of banks such as Standard Bank Group Ltd., Nedbank Ltd. and First National Bank to fund investment in other areas of the economy, Malema said at the end of a four-day meeting in Johannesburg that saw his election for a second term.
“We’re going to war comrades,” he said as the country’s Deputy President Kgalema Motlanthe looked on from the stage. “A war for radical policy shift.”
Malema, 30, wants to increase the role of the state in the economy to combat youth unemployment, poverty and inequality, which has changed little since the end of white minority rule in 1994. He threatened to withdraw support from anyone in the African National Congress who defended big business.
“Your time has come,” Malema said. “Were you delivering to the masses of the people or were you having dinner with the Oppenheimers?” The Oppenheimer family, a member of which founded Anglo American Plc (AGL), owns 40 percent of De Beers, the world’s biggest diamond company.
Malema mapped out the ANC Youth League’s plan for “economic freedom in our lifetime” that included the takeover of banks, land and mines.
“Without these banks, nationalization will not succeed,” he said. “If you do not nationalize the financial sector, the financial sector will hold back resources.”
His campaign has weighed on shares in companies such as Anglo American, the world’s third-biggest listed mining company, and AngloGold Ashanti Ltd. (ANG), Africa’s biggest producer of the metal, said Patrice Rassou, who helps manage about 330 billion rand ($48.6 billion) at Cape Town’s Sanlam Investment Management.
Standard Bank, Africa’s biggest lender, FirstRand Ltd. (FSR), which operates First National Bank, ABSA Group Ltd. (ASA), which is part-owned by Barclays Bank Plc, Nedbank Ltd., and Investec Ltd. (INL), together have a market capitalization of about 472.1 billion rand ($69.8 billion), quarter of South Africa’s gross domestic product in 2009.
The rand declined 0.3 percent to 6.7811 versus the dollar at 5:15 p.m. in Johannesburg trading.
Standard Bank rose 0.7 percent to 96.73 rand in Johannesburg trading today, while FirstRand slid 0.7 percent to 19.24, its fourth consecutive drop. ABSA fell for a third day, declining 0.1 percent to 132.90 rand, Nedbank slid 0.2 percent to 139.74 rand and Investec fell 0.3 percent to 53.50 rand.
“Anyone who says this is just the rumblings of a madman and can be ignored, is being naive,” Paul Theron, managing director of Johannesburg-based Vestact Pty Ltd., which manages more than 1 billion rand of assets for private clients, said today. “There could be a shift in ANC congresses which elect future leaders. It will have its impact in time.”
The government and the ruling party have repeatedly said nationalization isn’t official policy.
The Youth League resolutions “remain those of the league and do not alter ANC policies being implemented at government level,” the ANC said in an e-mailed statement today. “Pronouncements by the Youth League on such matters as the nationalization of mines and land redistribution, among others, form part of ongoing discussion” within the party.
The ANC has appointed independent economists to investigate different options of increasing state involvement in mining before the end of the year.
The panel was set up to “intellectually legitimize” the rejection of any nationalization policies, Aubrey Matshiqi, a research fellow at the Johannesburg-based Helen Suzman Foundation, said before the conference.
The panel’s research “mustn’t contradict the Freedom Charter,” Malema said, referring to a landmark statement of intent by the ANC, which in 1955 called for minerals, banks and other industries to be transferred to the people as a whole.
Much investment in South Africa represented an “imperialist agenda” as it didn’t benefit communities living around the country’s mines, Malema said. “What kind of investment is this which leaves our people in serious poverty?”
Malema said economic transformation would remain within the framework of democratic institutions. “We’ve got political power,” he said. “We need to use those institutions to change the property relations in South Africa.”
Anglo American Chief Executive Officer Cynthia Carroll said on Feb. 8 that giving private mines to the state in South Africa would be “the road to ruin,” because international investors would pull funding from the country.
Malema denied that his demands for the black majority to benefit more from an economy was racist against the country’s white minority.
“The real enemy is white monopoly capital,” he said. “They are the ones we are fighting against. In whose hands is this wealth? In whites.”
While the Youth League’s policy ideas are “economically dysfunctional” it isn’t surprising that they receive massive support in a country where the majority has been marginalized, Vestact’s Theron said. “Economic exclusion in South Africa was so thoroughgoing, it becomes very easy to convince people who are excluded,” he said. “We’re reaping what we sowed. This is the gift from our apartheid forefathers.”
To contact the reporter on this story: Franz Wild in Johannesburg at email@example.com
To contact the editor responsible for this story: Andrew J. Barden at firstname.lastname@example.org