President Cyril Ramaphosa [Photo: GCIS]
Finance Minister Tito Mboweni will be give details around the establishment of a sovereign wealth fund and a state bank when he delivers his Budget speech later in the month, President Cyril Ramaphosa said on Thursday evening when he delivered his State of the Nation Address.
The sovereign wealth fund is “a means to preserve and grow the national endowment of our nation”, Ramaphosa said. A sovereign wealth fund is a state-owned investment vehicle. Mboweni said late in 2019 that plans for a sovereign wealth fund were in the pipeline.
The establishment of a state bank is also going ahead, the president said. This would help “extend access to financial services to all South Africans”, he added.
Ramaphosa did not provide further information about the scope of the fund or the bank, saying Mboweni would provide further details on February 26.
South Africa has a large market of unbanked or under-serviced consumers. Prior to the launch of its mobile money service with UBank, MoMo, MTN said its research had shown some 11 million South Africans were unbanked.
Mboweni has previously suggested that a the establishment of a state-owned bank was crucial to assist South Africans who felt they had been discriminated against by established commercial banks, Fin24 previously reported.
“It’s a matter of responding to a cry amongst our people. That cry fundamentally has to do with the discriminatory nature of the banking institutions. There has to be a response. So it is a big task that he [Deputy Finance Minister David Masondo] has there,” Mboweni said in 2019.