- The ANC's Economic Transformation Committee has tabled a new proposal for economic recovery post-Covid-19
- The published proposal includes plans to change how pension funds will work
- The proposal is expected to be met with much resistance as it could threaten people's livelihoods
The ANC’s Economic Transformation Committee has published a new proposal document which includes planned changes to how pension funds will work in South Africa.
The document has outlined how the use of pension funds will be important in helping the government address funding shortfalls in areas such as infrastructure development and energy production.
To achieve this, the ruling party has proposed changing regulation 28 of the Pension Funds Act in order to boost the funding of infrastructure projects led by the state development finance institutions (DFIs) using private capital.
South Africa’s main state-owned DFIs are the Industrial Development Corporation and the Development Bank of Southern Africa.
BusinessTech reported that Regulation 28 of the Pension Funds Act limits the extent to which retirement funds may invest in particular assets or in particular asset classes
The ANC said:
“Changes should be made to Regulation 28 under the Pension Funds Act to enable cheaper access to finance for development."
The Daily Maverick reported that everything about the 30-page document, titled, Reconstruction, Growth And Transformation: Building a New, Inclusive Economy, points to the party heralding a new start, but much of it is built around the ANC’s existing policies.
The document was formally launched by head of the ANC's Economic Transformation Committee, Enoch Godongwana.
One of the important ways that pension funds are likely to be deployed is to help the struggling power utility Eskom. The ANC said there is a need for continued support for Eskom to overcome its immediate financial and technical challenges and to ensure stable electricity supply.
The proposal plans to prioritise various sectors such as land reform and agriculture, manufacturing, mining and the green economy.
The proposal is expected to trigger an intense debate as the use of pension funds has been met with much resistance in the country. DA MP Geordin Hill-Lewis said pension funds represent entire life savings for millions of South Africans.
Meanwhile, Briefly.co.za reported that the government interventions during the Covid-19 pandemic are failing to reach the most vulnerable people in society.
A recent study by NGO group Oxfam has revealed that as many as 12 000 people globally could die from Covid-19-related hunger. The study said South Africa is experiencing rapidly rising levels of hunger as millions that were managing before the pandemic have now been tipped over the edge.
The lockdown has exacerbated existing problems around foot security in the country. The "hard" lockdown Levels 4 and 5 presented the most devastating impact.
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