During his trip to Mangaung Metro, the South African Reserve Bank Governor, Lesetja Kganyago, took time to have a round table discussion with members of the Mangaung Business Chamber to discuss the current economic climate.
Popular topics included the recession, the effect of the Coronavirus on local business, crime in the country and the creation of a state bank.
“In creating a state bank, what ill in society are we trying to solve? What market failure are we trying to solve?
The state runs the biggest asset management company called the GIC, it’s got the largest pension fund called the GEPF (Government Employees Pension Fund), it’s got the largest industrial financing DFIs (development finance institutions) called the IDC, it’s got the largest infrastructure financing DFI called the DBSA (Development Bank of Southern Africa), it’s got a retail bank called the Post Bank, and I can go on.
But nobody says during these discussions that you already have four of these things, and you now want to create another one. I can’t say whether it is a good or bad thing. The reason is that the state must still submit an application to the Reserve Bank and I have to remain objective,” Kganyago explained.
With regards to the effect of the recession on higher learning institutions, Kganyago said the question is whether it is a funding issue, and if so, they should be giving more money to NSFAS. “So we have provided free higher education, and parents must pay for high school education. Where will the students going to higher education be coming from? So it looks like the coolest thing to do as a parent: find a top school that can get your child into university because once they get into university, it’s free. That is the kind of decisions we make as a society, but it is not for a federal bank to deliberate,” he added.
Crime in the province and the theft of cell phone tower batteries was also a concern for local business. “Something that people do not talk about is that the criminals have gone cyber. One of the emerging risks therefore is cyber crime. So we constantly have to watch the cyber risks of the South African financial sector, and we have to ask the sector how strong its cyber resilience is,” he concluded.
Seithati Semenokane
