Durban - The SACP, the architects of the state bank initiative in South Africa, said they would support KwaZulu-Natal bank Ithala being a subsidiary in a national banking system.
At the weekend ANC secretary-general Fikile Mbalula told a workshop held by the ANC in KZN that the government should work quickly to implement a state bank.
Mbalula was discussing the SA Postbank Limited Amendment Bill. The National Council of Provinces (NCOP) passed the bill on Tuesday.
The bill essentially proposes unbundling Postbank from the beleaguered Post Office ownership into an independent government-owned bank.
ANC provincial chairperson Siboniso Duma, while addressing the workshop, said the move was in line with the governing party’s 2017 resolution to establish a bank.
Duma added that while the bill specifically dealt with Postbank, Ithala bank in KZN, which is the only province that operates a state-owned bank, should not be sacrificed and instead be a subsidiary of a national government-operated banking system.
SACP national spokesperson Alex Mashilo said South Africa had delayed the state bank by 30 years at the expense of “workers and the poor and subjected them to financial exploitation by private banks”.
“The State is a major depositor of funds into the banking system but the State is not present as a beneficiary. This needs to be corrected.”
Mashilo said Ithala bank was a provincial bank and should remain as part of a national banking system.
“A national public banking system will have different banks, from provincial banks to municipal banks that are publicly owned.”
Mashilo said the scepticism over how a state bank could operate within a climate of fruitless and wasteful expenditure and corruption was misdirected.
“In every major scandal there is always private sector involvement.
“Corruption is always a public official working together with the private sector or private interests.”
Mashilo said there was a need to deal decisively with this corruption by putting systems in place.
“Corruption is the sabotage of public interest to benefit private interests.”
The most successful and profitable examples of state banks, as listed in Forbes The Global 2000 list, features three Chinese banks in the top five of the world’s best-performing companies.
Industrial & Commercial Bank of China Ltd, China Construction Bank and the Agricultural Bank of China combined employ more than 1.2 million people and have assets worth more than $16 trillion (about R294 trillion).
ANC provincial spokesperson Mafika Mndebele said they had made submissions with regard to the amendment bill for Postbank infrastructure to be used for a state bank, including Ithala being a subsidiary.
Mndebele said since 2009, 1 000 entities in various sectors including agriculture, tourism and energy had benefited more than R2 billion in finance from the bank.
“Our view is you need a state bank for the creation of jobs and for infrastructure.”
Mndebele said if the state was the custodian of its own funds then this would boost infrastructure development.
“In KZN alone this would create 233 000 jobs and one of the key mandates would be to assist SMMEs.
“It is easier for commercial banks to give someone R1 million to buy a car than to give them the same amount to buy a house,” Mndebele said.
Political analyst Professor Bheki Mngomezulu said the ANC had taken a number of policy decisions in 2017, including on the establishment of a state bank, land expropriation and radical economic transformation, but to date nothing had happened.
“The state bank has been on the party’s agenda for some time, but like other policies it has not even reached the implementation phase. The policy has been resuscitated on the eve of an election, and will probably feature in the party’s manifesto but whether it comes to fruition, remains to be seen.”
Mngomezulu said it was in the nature of politicians to speak the right language, but implementation was a different matter.
Governance expert Harlan Cloete said there was a crisis of confidence in state institutions especially state-owned enterprises.
“We have a governance and leadership problem with these institutions and this idea of a state bank, although it may be very noble, the crisis of confidence in governance and leadership is that the state does not have a good track record when it comes to managing these institutions.
“This is going into an election year and the ANC is pulling out all stops to prove that it is trying to alleviate the plight of the poor.”