SPONSORED | ‘There is a substantial pool of capital within the SA retirement savings industry to catapult SA through the Covid-19 crisis, and onto a higher and sustainable economic growth trajectory ...’ – Mazi_AM aluwani_capital ThirdWayZA MergenceIM
Sibusiso Mabuza, John Oliphant, Malungelo Zilimbola, Yoza Jekwa and Masimo MagermanAs we have seen in major crises in the past such as the two world wars, the Great Depression of 1929, and the 2008 sub-prime financial crisis — the world post the Covid-19 pandemic is set for major economic disruption and SA, in particular, will never be the same again.
Our economy has been broken for decades. The Covid-19 pandemic has accentuated pre-existing structural constraints and accompanying social inequalities. Regulations affecting capital allocation in the savings industry need to be amended to marry capital to opportunities in the real economy. For example, a report by FinFind shows the SMME funding gap to be between R86bn and R346bn, and yet the National Development Plan puts an emphasis on SMMEs as the key drivers for economic growth and job creation.
The majority of funds are allocated to JSE-listed companies where about 60% of their earnings are derived from offshore. And management teams of these corporates have been investing offshore where they have lost huge amounts of pensioners’ money. These offshore expansions have been done at the expense of local investment opportunities that had a potential to grow the SA economy and create jobs.
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