South Africa should look to pensions instead of an IMF bailout: ANC
The ANC is looking at the possibility of using private and public pension funds to rescue the country’s struggling state-owned enterprises.
In an interview with the Sunday Times Enoch Godongwana, head of the party’s economic transformation subcommittee, said that the asset management industry currently has R6 trillion under management which should be borrowed by government.
Godongwana said using this approach to gather funds is better than going the International Monetary Fund (IMF) for a bailout.
“Why would you go to the IMF and the World Bank and go and raise money when we have sufficient savings in the economy which you can borrow, probably far cheaper, and probably with little exchange rate risk?” Godongwana added that while the ANC is also currently investigating the use of prescribed assets, this is separate from raising money through pension funds.
“Borrowing from domestic markets is not prescribed assets, that is a separate investigation,” he said. On Thursday (15 August) the IMF stated that South Africa has not asked for its assistance, adding that it did not need a loan, currently.
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