• The ANC’s economic policy head said the party is investigating using prescribed assets to avoid an IMF bailout.
• Prescribed assets will force SA asset managers and pension funds to invest in the country’s bonds and state-owned-enterprises.
• The last time South Africa had prescribed assets, the apartheid regime forced retirement funds to invest half of all savings in government bonds.

ANC economic policy head Enoch Godongwana made headlines over the weekend when he said the party is investigating the use of prescribed assets for pension funds – as a way of avoiding getting an emergency loan from the International Monetary Fund (IMF).

Godongwana told the Sunday Times that the government could use this option to help fund, among others, embattled state-owned entities (SOEs).

The South African state is struggling with a growing debt problem, which now accounts to close to 60% of the country’s GDP.

Here’s what you need to know about prescribed assets:

What are prescribed assets?

It’s just a way of saying that percentage of your retirement savings will have to be invested in bonds issued by the South African government and state-owned enterprises like Eskom.

This will give them a reliable stream of money to fund their activities and help them repay their debts.

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