On Thursday, president Cyril Ramaphosa said that South Africa should look at funding finance development and infrastructure projects through the use of worker pensions.
On Thursday 22ndAugust during a parliamentary Q&A session, Ramaphosa said that the Congress of South Trade Unions backed the proposal, Reuters reported.
Ramaphosa said that the matter will still need to be discussed and in context of what can be done to use the resources within the country to stimulate growth in a purposeful manner. The development needs are huge and other places have used pension funds for developmental purposes and these pension funds have often seen a good return from infrastructure developments.
In a Sunday Times interview, a top ANC official said money from public and private pension funds could be used to rescue state-owned enterprises.
Head of the party’s economic transformation sub-committee, Enoch Godongwana, said the government should borrow the R6 trillion under the asset management industry. He went on to say that gathering funds this way is better than borrowing from the International Monetary Fund (IMF) for a bailout.
He also said why raise money by going to the IMF and the World Bank when the economy already holds sufficient savings that could be borrowed cheaper and with little exchange rate risk. Also, apart from raising money through pension funds, the ANC is looking at prescribed assets.
The January 2019 published election manifesto announced that the ANC planned to consider the introduction of prescribed assets on financial institutions to unlock resources for investments in economic and social development.
Article Source: https://businesstech.co.za/news/finance/336443/government-must-look-at-using-pension-funds-to-generate-growth-ramaphosa/