With the government’s debt levels worryingly high and SOEs in dire straits, economists are questioning the wisdom of the president’s proposal
New ideas are hard to come by, so it was a case of déjà vu for many investors when President Cyril Ramaphosa again touted the idea of a state-owned SA bank and sovereign wealth fund.
“To actually talk about a sovereign wealth fund in our context really is quite honestly a distraction,” said Cas Coovadia, MD of the Banking Association SA. “What we’ve got to concentrate on is getting our negative fiscal situation sorted out. It should be taken off the table.” Ramaphosa is leaving the details to finance minister Tito Mboweni when he presents his budget speech later this month.“We question how either of these can be realistically capitalised against the backdrop of weak growth and fiscal exhaustion,” Absa economist Peter Worthington said. The inclusion of these proposals in the president’s speech on Thursday was regrettable, he said.
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