{"id":782495,"date":"2024-07-15T11:19:22","date_gmt":"2024-07-15T09:19:22","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=782495"},"modified":"2024-07-15T11:19:27","modified_gmt":"2024-07-15T09:19:27","slug":"gauteng-doubles-down-on-new-state-owned-bank","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/782495\/gauteng-doubles-down-on-new-state-owned-bank\/","title":{"rendered":"Gauteng doubles down on new state-owned bank"},"content":{"rendered":"\n

Gauteng MEC of Finance and Economic Development, Lebogang Maile says the province still has its sights set on establishing a provincial state-owned bank.<\/p>\n\n\n\n

“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,” he said.<\/p>\n\n\n\n

Plans for a state-owned provincial bank were touted in 2022, but Maile said that these plans never really gained traction due to opposing views of how the bank would operate.<\/p>\n\n\n\n

Now, the Finance MEC said that consensus has been found that it should take the form of a ‘public-private partnership’ between the state and the private sector<\/p>\n\n\n\n

“There are certain things that can be done better when you work with the private sector; that’s why, in this case, it’s not just about a state owning it 100%; we will need the private sector to work with us.”<\/p>\n\n\n\n

When pressed by the SABC<\/a> about the ill-fate of many of South Africa’s state-owned enterprises (SOEs) to endemic corruption, Maile said that the Gauteng government is not looking to do it on its own, and having partners involved would ‘keep them in check’.<\/p>\n\n\n\n

The Finance and Economic Development MEC said 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.” <\/p>\n\n\n\n

Maile said that Gauteng is getting ready to put a formal proposal to a bank in the coming weeks; however, they cannot divulge which bank that is yet.<\/p>\n\n\n\n

Additionally, the province has not yet divulged exactly how the funding of the bank will work.<\/p>\n\n\n\n

The MEC responded to questions about this from the SABC <\/a>with “we will work with the private sector.” However, it did not go into details about the fiscal implications.<\/p>\n\n\n

\n
\"\"<\/a>
Gauteng MEC of Finance and Economic Development, Lebogang Maile (left) next to Deputy President Paul Mashatile (right). Photo: GCIS.<\/figcaption><\/figure><\/div>\n\n\n

The establishment of a provincial state-owned bank is not a new concept touted by the Gauteng government.<\/p>\n\n\n\n

Plans to establish the state bank were announced by Premier Panyaza Lesufi during his maiden State of the Province Address in 2023 after touting the idea in 2022.<\/p>\n\n\n\n

“The idea of the Gauteng State Bank is predicated on the principle of the state intervening in the economy,” said Lesufi.<\/p>\n\n\n\n

The Premier said that this follows the resolutions of the 54 National Conference of the African National Congress, which “affirmed that the state must develop a more effective program to ensure access to, and ownership of financial institutions by black people, youth and women.”<\/p>\n\n\n\n

Lesufi previously said that the bank would “extend access to financial services to all residents, specifically those who remain largely excluded from accessing financial services.”<\/p>\n\n\n\n

It would “provide tailored products such as a streamlined, low-cost transaction product with value-added features and could expand in future to include loan products,” he added.<\/p>\n\n\n\n

The Gauteng government has argued that having a state-owned bank is “one of the key mechanisms that could support the growth of the township economy and increase the overall contribution of Gauteng to the country’s Gross Domestic Product [GDP].” <\/p>\n\n\n\n

Gauteng\u2019s GDP is just over R2.4 trillion \u2013 almost 34% of the national GDP. <\/p>\n\n\n\n

However, unemployment remains one of Gauteng\u2019s biggest challenges.<\/p>\n\n\n\n

\u201cGauteng\u2019s unemployment rate at 33.7% is higher than the national average of 32.9%. Based on its working-age population, 4 out of 10 or 40% of people entering the labour force in South Africa are in Gauteng,\u201d said Maile.<\/p>\n\n\n\n

In hopes of changing this, the MEC said a state-owned provincial bank in partnership with the private sector might be the answer, as “a state-owned bank might bring great relief and help small businesses to access funding.\u201d<\/p>\n\n\n\n

The official opposition in the province, the Democratic Alliance [DA], previously slated<\/a> the idea of a state-owned bank in the province, saying that “it will be yet another dysfunctional state-owned entity that the ANC and its cadres will raid to the detriment of hard-working South Africans.”<\/p>\n\n\n\n

\u201cGauteng should rather focus on ensuring that the Township Economic Development Act is properly implemented to assist struggling township entrepreneurs and SMMEs,\u201d added the party.<\/p>\n\n\n\n

\n\n\n\n

Read: Minority Gauteng cabinet <\/a>announced <\/a>\u2013 with DA in the opposition benches<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The Gauteng Provincial Government is looking to go full steam ahead to establish a state-owned provincial bank in partnership with the private sector.<\/p>\n","protected":false},"author":101,"featured_media":781034,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[1652,5425,20210],"class_list":["post-782495","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-gauteng","tag-gauteng-provincial-government","tag-state-owned-bank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/782495","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\/101"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=782495"}],"version-history":[{"count":12,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/782495\/revisions"}],"predecessor-version":[{"id":782526,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/782495\/revisions\/782526"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/781034"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=782495"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=782495"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=782495"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}