{"id":704083,"date":"2023-07-14T12:02:07","date_gmt":"2023-07-14T10:02:07","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=704083"},"modified":"2023-07-14T12:02:07","modified_gmt":"2023-07-14T10:02:07","slug":"new-state-owned-bank-and-pharmaceutical-company-gains-ground-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/704083\/new-state-owned-bank-and-pharmaceutical-company-gains-ground-in-south-africa\/","title":{"rendered":"New state-owned bank and pharmaceutical company gains ground in South Africa"},"content":{"rendered":"\n<p>Gauteng is working on establishing two new state-owned enterprises &#8211; a bank and a pharmaceutical company. <\/p>\n\n\n\n<p>Gauteng Finance MEC Jacob Mamabolo said that a due diligence report on the new state bank had been finalised and handed over to the Gauteng Provincial Government.<\/p>\n\n\n\n<p>\u201cThis is a major milestone that we have reached and gives the process of establishing the state bank a thumbs up. We are now in a better position to move to the next level to consult with the Premier and consult broadly with stakeholders, including the Economic Development and Labour (Council),\u201d Mamabolo said.<\/p>\n\n\n\n<p>\u201cThe due diligence report clears the legal hurdles and provides Gauteng with a strong legal framework towards establishing a state-owned bank. We are now in a better position to move forward knowing very well that the work that we are doing complies with the legislation.\u201d <\/p>\n\n\n\n<p>The new state-owned bank aims to address current market issues by: <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Integrating small, micro, and mid-sized businesses (SMMEs) and unserved individuals in the formal financial sector;<\/li>\n\n\n\n<li>Driving a mission of financial inclusion and security while offering a differentiated value proposition to customers whose needs are not being met by current bank offerings;<\/li>\n\n\n\n<li>Provide tailored products, including launching a streamlined, low-cost transaction product set with value-added features and expanding to include loan products in the future.<\/li>\n<\/ul>\n\n\n\n<p>\u201cWe are convinced that by supporting township entrepreneurs, including ensuring that they have access to tailor-made financing products to expand their businesses, we will create new jobs, increase access to goods and services, and promote much-needed economic development in our communities,\u201d the MEC said. <\/p>\n\n\n\n<p>\u201cThe state-owned bank is one of the key mechanisms that can support us to grow the township economy and increase the overall contribution of Gauteng to the country\u2019s gross domestic product.\u201d <\/p>\n\n\n\n<p>As reported by <a rel=\"noreferrer noopener\" href=\"https:\/\/www.businesslive.co.za\/bd\/national\/2023-07-13-plans-for-state-owned-gauteng-bank-steam-ahead\/\" target=\"_blank\">Business Day<\/a>, the MEC said that the new bank will not compete with the proposed state-owned bank that the national government wants to introduce. <\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/07\/Finance-MEC-Jacob-Mamabolo.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"683\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/07\/Finance-MEC-Jacob-Mamabolo-1024x683.jpg\" alt=\"\" class=\"wp-image-704099\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/07\/Finance-MEC-Jacob-Mamabolo-1024x683.jpg 1024w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/07\/Finance-MEC-Jacob-Mamabolo-300x200.jpg 300w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/07\/Finance-MEC-Jacob-Mamabolo-768x512.jpg 768w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/07\/Finance-MEC-Jacob-Mamabolo.jpg 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong>Gauteng Finance MEC Jacob Mamabolo (Source: Twitter)<\/strong><\/figcaption><\/figure><\/div>\n\n\n<p>However, several experts have voiced their concerns that such a strategy &#8211; which draws parallels with the national government&#8217;s plans for its state-owned bank &#8211; will not work, as providing credit to those that cannot afford it would deepen South Africa&#8217;s debt burden.<\/p>\n\n\n\n<p>Speaking to&nbsp;<a rel=\"noreferrer noopener\" href=\"https:\/\/www.youtube.com\/watch?v=rg-vDkkCt3k\" target=\"_blank\">ENCA<\/a>, Dawie Roodt, the chief economist at Efficient Group, said that a state-owned bank, a lender of credit, could see people using funds to purchase goods without having the money to pay back the bank.<\/p>\n\n\n\n<p>Roodt added that it does not serve the country\u2019s needs and that lending money to poor people who can not get money from regular banks can potentially lose \u2018big money&#8217;. <\/p>\n\n\n\n<p class=\"has-medium-font-size\"><strong>Pharmaceutical company<\/strong><\/p>\n\n\n\n<p>Due diligence reports for the state-owned pharmaceutical company have also been completed, which supported the establishment of the entity, Mamabolo said. <\/p>\n\n\n\n<p>The new company will manage supply chains, medicine procurement, the distribution of medicines to the provincial healthcare facilities, inventory, dispensary to the public and other objectives. <\/p>\n\n\n\n<p>The process was followed by appointing an advisory panel of pharmaceutical and healthcare policy experts from the public and private sectors. <\/p>\n\n\n\n<p>\u201cThe panel&#8217;s role is to provide strategic guidance and advice on developing a business case for the pharmaceutical company and participating in consultations with relevant stakeholders,\u201d he said. <\/p>\n\n\n\n<p>\u201cThe panel will serve as an important mechanism for the proper regulation and oversight of the work to be conducted and will play a critical role in providing research and development support, disseminating proper information on medicines and addressing public health problems.\u201d <\/p>\n\n\n\n<p>The MEC said that his department finds establishing the new state-owned bank and pharmaceutical company incredibly important, with over R4 million already being spent on the due diligence reports. <\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Read: <\/strong><a rel=\"noreferrer noopener\" href=\"https:\/\/businesstech.co.za\/news\/government\/704011\/sarss-stern-message-to-south-africa\/\" target=\"_blank\">SARS\u2019s stern message to South Africa<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gauteng Finance MEC Jacob Mamabolo  says the new state-owned entities will boost the country&#8217;s GDP. <\/p>\n","protected":false},"author":95,"featured_media":687523,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[26],"class_list":["post-704083","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/704083","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=704083"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/704083\/revisions"}],"predecessor-version":[{"id":704213,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/704083\/revisions\/704213"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/687523"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=704083"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=704083"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=704083"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}