Government going ahead with state-owned bank, says Tito Mboweni
11 July 2019 - 21:56
byBekezela Phakathi
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
The government is forging ahead with plans to establish a state-owned bank.
Finance minister Tito Mboweni said during the budget vote debate on the national treasury that his deputy, David Masondo, had been tasked with leading the drive to establish a state-owned bank.
"It's about addressing the discriminatory nature of established banks,"said Mboweni, as he concluded the debate.
In 2017, parliament shot down the EFF’s motion to nationalise commercial banks.
Other parties, including the ANC, suggested that such a move would not benefit the poor, but "it is the poor who will ultimately pay for it".
The country would not only gain control of the banks but would be burdened with their liabilities, which the taxpayer would have to pay for, the ANC argued at the time.
The EFF’s has argued that the financial services sector is one of the biggest sectors in the economy, contributing about 20% to GDP, yet it remains the least transformed.
The party said that there was not a single bank in SA with meaningful black ownership, and banks had done little to improve the socioeconomic status of the majority of the population.
The EFF proposed that parliament legislate 51% state ownership of all banks. The rest, the party stated, would be owned by pension fund institutions, co-operatives and private individuals.
The party also suggested that the state should create a state-owned bank, which would be used, among other functions, to distribute social grants, pay all government employees and provide finance for business, housing and vehicles for ordinary South Africans.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Government going ahead with state-owned bank, says Tito Mboweni
The government is forging ahead with plans to establish a state-owned bank.
Finance minister Tito Mboweni said during the budget vote debate on the national treasury that his deputy, David Masondo, had been tasked with leading the drive to establish a state-owned bank.
"It's about addressing the discriminatory nature of established banks,"said Mboweni, as he concluded the debate.
In 2017, parliament shot down the EFF’s motion to nationalise commercial banks.
Other parties, including the ANC, suggested that such a move would not benefit the poor, but "it is the poor who will ultimately pay for it".
The country would not only gain control of the banks but would be burdened with their liabilities, which the taxpayer would have to pay for, the ANC argued at the time.
The EFF’s has argued that the financial services sector is one of the biggest sectors in the economy, contributing about 20% to GDP, yet it remains the least transformed.
The party said that there was not a single bank in SA with meaningful black ownership, and banks had done little to improve the socioeconomic status of the majority of the population.
The EFF proposed that parliament legislate 51% state ownership of all banks. The rest, the party stated, would be owned by pension fund institutions, co-operatives and private individuals.
The party also suggested that the state should create a state-owned bank, which would be used, among other functions, to distribute social grants, pay all government employees and provide finance for business, housing and vehicles for ordinary South Africans.
phakathib@businesslive.co.za
Proposed law for state-owned banks given green light
LETTER: State should not run businesses
EDITORIAL: Economic slump should instil a sense of urgency
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Black industrialists programme to get R40bn boost, says Ebrahim Patel
Implementation of economic reform is a job for right now, Cyril Ramaphosa tells ...
Proposed law for state-owned banks given green light
Major banks agree to fund Joburg’s inner city overhaul
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.