New state-owned bank is coming
Gauteng Premier Panyaza Lesufi has reiterated his promise to establish a state bank for the province and said local and international banks have approached him to partner on the project.
Lesufi delivered his State of the Province Address (SOPA) on 15 August 2024, outlining his achievements over the past year.
“Last time when we met like this, we committed to establishing a state bank and a pharmaceutical company,” he said.
“We are pleased to report to you that we have since been approached by various local and international banks who want to partner with us to realise our dream of a provincial state bank as a vehicle to change the look and feel of Gauteng’s townships.”
BusinessTech reported last month that Gauteng MEC of Finance and Economic Development Lebogang Maile also reiterated the province’s plan to establish the provincial state-owned bank.
“We will intensify efforts to finalise the establishment of a provincial State Bank whose key objective will be investing in projects characterised by low private sector investment and high social returns,” Maile said.
The idea of a state bank for Gauteng was first proposed in 2022 in an effort to address the financial needs of sectors that are often overlooked by private banks, such as youth, women, and people living with disabilities.
However, Maile said these plans never really gained traction due to opposing views of how the bank would operate.
Now, the Finance MEC said consensus has been found that it should take the form of a ‘public-private partnership’.
The bank is expected to provide infrastructure, business information, and capital to help local businesses grow, ultimately contributing to the province’s economic stability and development.
However, several roleplayers have opposed the idea, with the DA warning last month that the provincial state bank will become another vehicle for corruption and cadre deployment.
“This will severely impact service delivery in a province where residents are already receiving little to no service delivery,” said Ruhan Robinson, DA Gauteng Shadow MEC for Finance.
“State-owned entities across the board have been marred by mismanagement and corruption.”
“Entities like Eskom, Transnet and South African Airways are but a few examples of entities that have been mismanaged to the precipice of collapse. There is no assurance that this state-owned bank would not follow this same trajectory.”
Robinson warned that if the ANC-led provincial government is truly committed to ensuring economic growth and the creation of more job opportunities, it will first meet the annual job creation targets.
“While the DA supports feasible initiatives to grow the economy and create jobs, we believe that the private sector should be enabled to grow the economy while limiting state participation to creating a conducive environment for growth,” he said.
“The DA once again demands that the feasibility study into the Provincial State-Owned Bank be made public.”
“We will be submitting questions again to the Gauteng Provincial Legislature (GPL) to determine exactly how the proposed Provincial State-Owned Bank will operate and where the money for this bank will come from.”
He said Gauteng residents deserve a government that is committed to rooting out corruption and not a government that is only focused on enriching those who are politically connected.
Maile was also recently pressed by the SABC about the ill-fate of many of South Africa’s state-owned enterprises to endemic corruption.
He said that the Gauteng government is not looking to do it alone and that having partners involved would “keep them in check”.
He explained that the province is actively looking for a “partner who knows how to run a bank, has systems, money, knowledge and skills so that we don’t try and learn on the job”.
Maile said Gauteng is getting ready to put a formal proposal to a bank in the coming weeks. However, he could not divulge which bank that is yet.
In his most recent State of the Province Address (SOPA), Lesufi also did not specify which banks have approached the government to partner with them.
By Bianke Neethling. This article was first published by Daily Investor. Read the original here.
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