The South African government is formally considering launching a state bank, which will be able to access different forms of capital, in addition to taking deposits.
The Sunday Times, which has seen the document in question. reported that the cabinet’s economic cluster has created an economic reconstruction and recovery plan which includes the ANC’s proposals to launch a state bank that would be able to access retirement savings at favourable rates.
The proposal to launch a state bank and access pension funds was first mooted in the ANC’s own recovery plan last month.
The Sunday Times, which has seen the document in question, said the document gives no details about the work it says has already been done with regards to creating a state bank, or say how much has been budgeted for it.
According to an ANC document on economic reconstruction leaked in May to the Sunday Times, the ruling party proposes to use direct financial interventions by the state pension fund, the Public Investment Corporation (PIC) and the Reserve Bank to “fund long-term infrastructure and capital projects” to help revive the economy.
The asset management industry – which includes pension funds, insurers and other investors – has R8 trillion under management. But there has been an uproar in the past over over any suggestion to force pension funds to invest in state-owned entities or government bonds.
“Regulation 28 of the Pension Funds Act will be amended in order to unlock the funding of long-term infrastructure projects and high impact capital projects, and the amendment..will facilitate direct access to pension funds’ pool of resources by state development finance institutions,” the document says.
The ultimate end goal is to support economic recovery and build a new fast, inclusive economy.
For more read: State access to pension funds takes step closer
