The ANC is legislating for more state behemoths — this time the creation of state-owned banks. These would apparently function alongside the existing bank structures, which according to the EFF’s populist slogans are “instruments and mechanisms of financial exclusion of the people”.
Your columnist, Hanna Ziady, points out that any such additional structure is unnecessary (“SA Should Tread with Caution over Ideas of State-Owned Banks”, April 1).
There is no “exclusivity”. The shares of the banks are held by institutions and funds as well as the Public Investment Corporation, so they already represent the savings and pensions of a large portion of the population.
Even when considering the financing of development, the figures from the SA Banking Association confirm their substantial investment support for transformational infrastructure, black enterprise, black agriculture and affordable housing. Any additional funding in the future could be invested through the existing structures of the Industrial Investment Corporation, Development Bank of Southern Africa or the Land Bank.
Not content with 25 years of a disastrous record of state-owned enterprises (SOEs) looted, corrupted and mismanaged by their incompetent cadres, the ANC continues with projects to enlarge this sector and lately even with new state ventures outside SA.
One of the keys to China’s economic rise has been its success in reducing the sprawl of state firms that initially dominated its economy. From accounting for nearly four-fifths of output, this has been drastically restructured to less than a fifth today. The role of SOEs should be to ensure investment in infrastructure and development in the prime sectors of the economy.
What have our SOEs got to show? The Eskom crisis, its inflationary costs and its rolling power cuts, added to Transnet’s bottlenecks at railways and ports, have instead suffocated development and been a drag on productivity and growth.
All the others — SAA, the SA Post Office, Denel, PetroSA — show a continued need for Treasury bailouts, with certainly no contribution to our economic development.
It is time the government realised the state should not be running businesses.
Alan Mantle, via e-mail