The ANC’s head of Economic Transformation, Enoch Godongwana, says that the party is moving away from talk of ‘prescribed assets’ as economic policy, but still wants to find ways to ‘unlock’ South Africa’s pensions to assist with the country’s infrastructure goals.

Godongwana was speaking to Insurance company Alexander Forbes in an interview on a range of economic topics, including the party’s plan for pensions and prescribed assets in South Africa.

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Buzz around prescribed assets came about following the ANC’s 2017 policy conference – and subsequently its election manifesto in 2019 – where the party listed the introduction of ‘prescribed assets for pension funds to mobilise funds from financial institutions for social infrastructure’.

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The announcement incited concerns from investors and members of retirement funds because of the possible implications it could have on investment portfolios and investment outcomes in the country.

Godongwana explained that the policy of prescribed assets came as a result of the challenges in South Africa, which have resulted in sub-optimal economic growth.

“Unemployment and the country’s recent credit rating downgrade to junk status are just some of the issues that have created this economic environment,” he said. “We have learnt that there are two main problems that have led to this precarious economic and social environment that we find ourselves in.”

Godongwana said that there is a high level of underdevelopment and poverty in the country that needs attention, and this is where infrastructure plays a critical role. The central point of contention is how this infrastructure will be funded – and if prescribed assets would be introduced to force the private sector into participating in capital provision.

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