Julius Malema, youth leader of South Africa’s ruling African National Congress, called for the nationalization of banks including Standard Bank Group Ltd., Nedbank Ltd. and First National Bank to help fund a state takeover of the country’s mines.
Malema, 30, who on June 17 won a second term as ANC Youth League President, said the group’s demands to nationalize the country’s mines could not be met unless banks came under state control and provided funding.
“We must fight to control FNB, Standard Bank, Nedbank,” Malema said today, on the last of the four days of a Youth League elective conference. “Without these banks nationalization will not succeed. If you do not nationalize the financial sector, the financial sector will hold back resources.”
Under Malema, the Youth League has called for the nationalization of mines, banks and land to combat youth unemployment, poverty and inequality in Africa’s biggest economy. Their drive has helped depress shares in companies such as Anglo American Plc (AGL) and AngloGold Ashanti Ltd. (ANG), the continent’s biggest producer of the metal, said Patrice Rassou, who helps manage about 330 billion rand ($48.6 billion), including AngloGold and Anglo American shares, at Cape Town’s Sanlam Investment Management.
South Africa has the world’s biggest deposits of platinum, chrome and manganese. Standard Bank is Africa’s largest lender, while First National is owned by Firstrand Ltd. (FSR) Barclays Bank Plc holds a stake in Absa Group Ltd. (ASA)
“I expect the financial markets to counter track the rise and fall of Julius Malema’s political fortunes,” Nic Borain, an independent political consultant, who advises companies including London-based Religare Capital Markets Ltd., said on June 17. “The financial markets are deeply concerned about nationalization.”
South Africa’s government has repeatedly said nationalization isn’t official policy. Still, 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, said Aubrey Matshiqi, a research fellow at the Johannesburg-based Helen Suzman Foundation.
The panel’s research “mustn’t contradict the Freedom Charter” or face opposition from the Youth League, Malema said, referring to a landmark statement of intent by the ANC, which in 1955 called for minerals, banks and other monopoly industries to be transferred to the people as a whole.
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 Plc (AAL) 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 has also played on South Africa’s racial tensions, saying that whites, who prospered under minority rule until 1994, “feel threatened by the aspirations” of those demanding that everyone benefits from the country’s natural wealth equally. Malema said demanding that the black majority benefits more from an economy controlled by whites isn’t racist.