ANC Doesn’t Want To Bail Out SOEs With Pension Funds

Head of the ANC’s economic transformation subcommittee, Enoch Godongwana, has dismissed the claims that the ANC wants to use pension funds to provide financial relief to state-owned enterprises (SOEs).

Speaking at the webinar organised by the Progressive Business Forum on Monday evening, Godongwana discussed the party’s economic recovery plan. He has said there’s no truth to the reports that the ANC wants to review regulation 28 of the Pension Funds Act so that it can use pension funds to bail out struggling SOEs.

“I want to dismiss and debunk the claim that we want to utilise pension funds to bail out collapsing state-owned enterprises,” said Godongwana, according to . “And the latest theory is that we want to fund the state bank. All of those things are mischievous, with the intention of discrediting our argument. That’s not where we are at the moment.”

The document detailing the ANC’s economic transformation committee’s intentions titled “Reconstruction, Growth and Transformation: Building a New and Inclusive Economy”, published last month, is where the proposals to amend regulation 28 first captured public attention. It describes a mobilisation of assets into a state bank, which in turn would invest savings into infrastructure projects, but only if they are profitable — a highly unlikely outcome, given the ANC’s track record.

The document says the ANC plans to “increase access of the savings of South Africans to fund long-term infrastructure capital projects managed by development finance institutions (DFIs)”. This paints a picture entirely contradictory to Godongwana’s statement, who repackaged the shorter explanation with verbosity and sophistry, but his statement effectively confirms that the party does plan to use pension funds for SOE bailouts.

“You will recall that in our conference, we emerged with a proposition which suggests that we should look at prescribed assets,” said Godongwana on Monday.

“When we talk about tweaking regulation 28, we are moving in a slightly different [position] from what conference said. We are moving from an environment where there is no enforced prescription, but you create an environment where trustees can be able to invest in infrastructure projects, as long as those infrastructure projects are profitable.”

Godongwana has also said that the ANC has undergone an ideological shift of sorts and that it is open to leveraging public-private partnerships for the building and operating of state infrastructure.

“That is the new thinking within the ANC,” he said.

Co-operation between role players would be key in efforts to recover the economy, he said, adding that the government, business and other parties already agreed on a range of areas.

Originally published at https://essentialmillennial.com on August 18, 2020.