ANC proposes greater financial intervention to revive economy after pandemic
An ANC document on economic reconstruction, leaked to Business Times, is proposing using private pension savings and direct financial interventions by the Public Investment Corp and the Reserve Bank to"fund long-term infrastructure and capital projects" to help revive the economy after the Covid-19 crisis.
It calls for a"necessary regulatory mechanism to ensure increased pension fund investments directly into projects such as real assets, which can unlock capital that is currently not finding its way into [these] projects". The draft document also proposes that the Bank create a funding instrument to the tune of R500bn that will allow DFIs to access funding for infrastructure projects at favourable rates."This should be offered at a developmental yield to maturity, with time horizons that are beyond the appetite of funding from private commercial banks. DFIs should be allowed to deploy this funding for infrastructure projects.
Economist Duma Gqubule said:"This will set them on collision course with the GEPF [Government Employees Pension Fund, on whose behalf the PIC invests] and Reserve Bank, which doesn't see its role as funding development. We must grab popcorn and watch what's going to happen here." It also calls on the ANC to revisit the resolution on creating a state-owned pharmaceutical company"that will respond to and intervene in the curbing of medicine prices".
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