The African National Congress (ANC) is proposing using private pension savings and direct financial interventions to revive South Africa’s economy after the COVID-19 crisis, according to a report in the Sunday Times.
According a ANC document on economic reconstruction leaked to the Sunday Time, the ruling party proposes to use direct financial interventions by the state pension fund, the Public Investment Corporation (PIC) and the Reserve Bank to “fund long-term infrastructure and capital projects” to help revive the economy.
The document proposes more state interventions such as speeding up the creation of a state-owned bank and state-owned pharmaceutical company.
The asset management industry – which includes pension funds, insurers and other investors – has R8 trillion under management. But there has been an uproar in the past over over any suggestion to force pension funds to invest in state-owned entities or government bonds.
The Sunday Times also reported that the draft document also proposes that the Bank create a funding instruments to the tune of R500 billion that will allow development finance institutions to access funding for infrastructure projects at a favourable rates.
For more read: Pensions may fund recovery