The National Treasury says plans are underway for the establishment of the State Bank. Treasury was briefing a joint meeting of the Finance committees of both the National Assembly and the National Council of Provinces on its annual performance.
In the State of Nation Address, President Cyril Ramaphosa confirmed that the government was set to establish the Sovereign Wealth Fund and the State Bank.
Ramaphosa also said he supports the establishment of additional banks in South Africa that would focus on offering services to people living in the townships.
The President said he would like to see a bank that also focuses on small and medium enterprises, which are key to the financial welfare of the country.
In the video below, SACP welcomes President Cyril Ramaphosa’s decision to develop a Sovereign Wealth Fund and a State Bank.
Treasury Director-General Dondo Mogajane says a preliminary report on the establishment of the State Bank has been finalised and will be presented to Cabinet.
“Work has been done. A preliminary report done by our G-tech, which is a subsidiary of Treasury, has been completed to inform us of the options that are available for us as we move towards finalisation of the establishment of the State Bank. So the next step is for it to go to Cabinet for preliminary thoughts on what we think we have or ideal what it will be like.”
Challenges
In February, an economist at Old Mutual Investment, Johann Els, said it will be extremely difficult for the government to find capital for the establishment of a State Bank and funds for starting a sovereign wealth fund.
Els said the government has too many financial problems to deal with for it to successfully establish the two entities.
“On the other part, Eskom’s problems remain unresolved, calls for free education. We would have done a whole lot better than where we actually are. They can’t run the state-owned enterprises effectively. Where are we you to find the money to capitalise the state bank, where are going to find the money to state a Sovereign Wealth Fund. There are lots of other problems that we must fix first.”
