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Mandela calms jittery investors

Rory Channing
Wednesday 06 July 1994 18:02 EDT
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JOHANNESBURG - South Africa's government of national unity insisted yesterday it was committed to an investor-friendly economic policy, following the shock resignation of the highly-regarded Finance Minister, Derek Keys.

It also sought to allay lingering concerns in financial markets that the decision to step down by Mr Keys, who cited personal reasons, might mask policy rifts within the South African cabinet.

'There need be no cause for concern that the policies (of Mr Keys) will be abandoned,' President Nelson Mandela told reporters while discussing an aid package from Japan.

The government would stay the course of macro-economic stability, fiscal discipline and sustained growth, while pursuing its Reconstruction and Development Programme (RDP), which is designed to enhance the living standards of apartheid's victims.

Financial markets, which were hit hard on Tuesday as rumours of the minister's resignation swept the country before it was announced, remained brittle yesterday morning.

'I'm sure the markets, like me, suspect some tension at cabinet level between those who just want to spend, and those who would say: hang on,' said Tony Twine, an economist with the business consultancy, Econometrix.

President Mandela named a prominent former banker, Chris Liebenberg, to succeed Mr Keys, who had been the head of the country's second biggest mining and industrial house before he was co-opted by Mr Mandela's predecessor, F W de Klerk, into becoming a member of the cabinet in 1992.

Mr Mandela, in forming his all-party national unity government, which is dominated by the socialist-leaning African National Congress (ANC), retained Mr Keys to reassure foreign and local bankers and businessmen.

The Deputy Finance Minister, Alec Erwin, an ANC member, yesterday drove home the same message as conveyed by Mr Keys in announcing his resignation.

'There's no tension on policy whatsoever . . .

'Clearly if we'd all had our way, we'd have wanted minister Keys to stay on.' He outlined a relationship of close co-operation between Mr Keys and ANC officials throughout 1993 and during this year's run-up to April's first all-race elections.

'We've worked together on policy, and one really can't stress enough that there are no differences on that issue.'

The government believes Mr Liebenberg will fit in with its policies. Mr Keys will stay on board for what Mr Erwin described as important months ahead, while the RDP gets off the ground, preparations are completed for a return to world capital markets and the groundwork is laid for the budget in March.

(Photograph omitted)

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