During the recent Infrastructure South Africa Project Preparation Roundtable and Marketplace, President Cyril Ramaphosa claimed the nation was working hard to resolve the dire situation it finds itself in.
Whereby he stated, “The pandemic worsened an already dire situation, severely disrupting economic activity and putting numerous investments on hold. Our priority now is driving the implementation of South Africa’s Economic Reconstruction and Recovery Plan.”
While this might sound commendable, how feasible is this golden plan? Especially when looking at what is being proposed.
After months of discussions with both the Private Sector and Banking Institutions, the Government is now in talks with pension fund managers.
Head of the Investment and Infrastructure, Dr Kgosientsho Ramakgoba says these talks are focused around potential infrastructure investments in the country.
Talking during the launch of Ramaphosa’s “save the country meeting”, Ramokgopa explained that currently, the country’s pension funds are sitting on a ‘big pool of liquidity’ and they are now starting to explore investment in infrastructure as an additional asset class.
Ramaphosa, himself, said, “These include large-scale building projects, community and social infrastructure, and infrastructure maintenance.”
According to the president, over the next four years, the Government hopes to unlock R1 trillion in infrastructure investment.
Prior to recent developments, Ramakgoba highlights that pension funds were not initially on the table. However, this has now changed, and he affirms they are part of the exercise of co-creation. By cooperating, the Government will possibly be able to tap into that big pool of liquidity.
As fantastic as these words sound, there is great concern around the topic for the obvious reasons.
Despite this and motivating the agenda, Ramokgopa stated that previous infrastructure funding had been taken directly from the Government’s purse, but the impact of Covid-19 had led to a severely diminished fiscus. This has left the Government searching for new sources of funding, but should they be allowed to delve into pension funds—the same funds, so many have worked for their entire lives? Especially when looking at the blatant corruption during the height of the pandemic and the large sums of monies which were looted.
Do you feel comfortable with the Government having access to pension funds? If not, tell us why the ruling party should not be allowed to work with these funds?
Authors: Quinton Boucher and Calvin Swemmer
Eduted: Calvin Swemmer