(Minutes read)
· South Africa President Cyril Ramaphosa has expressed his support for setting up a state bank, on the plea that a number of developing countries have the advantage of these institutions, which have relevance in the country’s present economic growth dynamics
· He was speaking to journalists as part of a SA National Editors Forum meeting recently. Ramaphosa said that the country’s banking sector was controlled by just a few banks, which are risk averse
South Africa President Cyril Ramaphosa has expressed his support for setting up a state bank, on the plea that a number of developing countries have the advantage of these institutions, which have relevance in the country’s present economic growth dynamics.
He was speaking to journalists as part of a SA National Editors Forum meeting recently. Ramaphosa said that the country’s banking sector was controlled by just a few banks, which are risk averse. He wanted for the country more options in terms of accessing loans. In a country, he added, where the banking sector was risk averse, there should be entities that operate in the middle sector which have risk appetite and should be run on the best governance principles.
Finance minister Tito Mboweni has also endorsed this view. He said that a State Bank was cortically important for a developing country like South Africa and would be a potential positive disruptor to the financial system.
In the meantime, the South African , cabinet approved for the posting of the South African Postbank Amendment Bill for public comment. The bill provides for the establishment of the South African Postbank Holding Company in terms of the Banks Act. However, it is still not clear whether government would push for a new entity to run a state bank or whether it will use one of its existing institutions – such as the land bank or post bank.
On Friday, cabinet approved the publication of the South African Postbank Amendment Bill for public comment. This will allow the post bank to offer more financial services to the public.The framework was approved by Cabinet in November in 2020 and structured consultation with various sectors of society are now underway.
