South Africa is desperate for money. So, should government be allowed to use some of your private pension funds to help? Courtesy #DStv403
JOHANNESBURG - With a ballooning debt problem hanging over the South African economy, the governing party, ANC is suggesting government be allowed to use some of citizens private pension funds to help.
The ANC proposed again that the state should be allowed to tap into trillions of rands worth of assets.
The state could make it law that some pension funds must be invested in government bonds and state-owned enterprises.
The proposal would see workers money being pumped into the likes of Eskom or SAA.
President Cyril Ramaphosa says the matter still needs to be looked at broadly.
“We are faced with a situation where our financial resources have been depleted. And we are facing a situation where our developmental needs are enormous. And in a number of other places, pension funds funding is utilized for developmental purposes, for infrastructure, and quite often those pension funds make good returns,” he said.
The Congress of South African Trade Unions supports the ANC's initiative.
The union's president Zingiswa Losi said the PIC money has always been invested in rescuing companies, using Edcon as an example.
But analyst Petri Redelinghuys warns this could be risky.
"The risk is if Eskom goes down, if Eskom literally goes bust and can't pay its debt, at that point the pension will feel pain, will take a capital loss."
The ANC is looking at the possibility of using private and public pension funds to rescue the country’s state-owned enterprises. Courtesy #DStv403