Lungile Ntimba
President Cyril Ramphosa said revealed that the implementation of a new centralised model for State-Owned Enterprises (SOE) towards the establishment of a sovereign wealth fund – is the solution to sustain economic growth.
At the heart of it he said lies the plan to establish the sovereign wealth fund to be used to preserve and grow the country’s wealth for the benefit of future generations.
“The fund will help to ensure that the national wealth of our country is effectively used to support economic and social development for years to come,” Ramaphosa said responding to the question asked by the Chairperson at Standing Committee on Finance, Joe Maswanganyi.
Ramaphosa pointed out that other countries have successfully built up capital from the high performance of SOEs rather than from the fiscus.
He further said South Africa is currently not in a condition to immediately enable the establishment of a sovereign wealth fund because of budget deficits.
Therefore, he told lawmakers that the additional resources are needed to reduce the debt burden and improve the delivery of services.
“We also need to increase investment in the maintenance of basic service infrastructure,” he said.
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