State-owned bank to help majority

November 19 2010 at 05:45am
By Wiseman Khuzwayo
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Independent Newspapers
ANC Youth League spokesman Floyd Shivambu says commercial banks only create an indebted black middle class. Photo: Leon Nicholas
Euphoric in the conviction of success with the nationalisation of mines following the ANC engaging the issue with the appointment of researchers, the youth wing has turned its sights onto the establishment of a state-owned bank.

Addressing the fourth annual investment conference of the Association of Black Securities and Investment Professionals in Johannesburg yesterday, ANC Youth League spokesman Floyd Shivambu said commercial banks only assisted in the creation of the indebted black middle class, which owned nothing but debt.

“The financial sector, including banks and insurance companies, are not helping our people, particularly the black majority and Africans in particular,” Shivambu said.

He called for the establishment of a state-owned bank through the recapitalisation of the Post Bank or the creation of a new entity that dealt with the financing of developmental programmes such as housing, transport, infrastructure and new industries.

He said the black middle class owned nothing and owed banks lots of money for housing and vehicle loans, and those in huge empowerment deals were indebted for life because they would not be able to pay back the banks before they died.

Shivambu said the banks did not fund developmental research and innovation, new industrial development and small businesses.

The state needed to ensure that the financing of the majority of empowerment deals by the banking industry should be directed towards new labour-intensive industrial processes and economic activities.

Shivambu said the state should control and be in ownership of the strategic sectors of the economy. This would make it a real developmental state and lead the private sector on the other aspects of the economy, such as industrialisation and banking norms.

“The state will be able to lead the redress and transformation programmes because the private sector is incapable of leading transformation in a way that will undo the injustices of the past,” Shivambu said.

He said the transformation charters adopted for the financial and mining sectors and other strategic sectors were proof that the private sector alone was incapable.

All public accounts should be shifted to the state bank, said Shivambu, and all public servants should be paid through the bank.

The Industrial Development Corporation (IDC) should be linked to the state bank and both state-owned entities should invest heavily in research and innovation.

Shivambu said that the state bank should invest heavily in new industries that beneficiated and industrialised South Africa’s natural resources and should consider funding import-substituting industrial projects, such as communication gadgets and electronics.

The public sector financing of industrial development through the IDC, the Development Bank of Southern Africa and the Land Bank was weak, while the National Youth Development Agency was under-funded, and the National Housing Finance Corporation (NHFC) was “useless”.

Shivambu said the NHFC should be recapitalised to fund decent housing development for middle-income groups who could not get loans from private banks. He added that legislation should be passed to limit the repayment of housing loans to 10 years.

Samson Moraba, the chief executive at the NHFC, was not available for comment.

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Comments by Sonny

Ramos has already taken over ABSA bank, what more do the money hungry cronies want?

ANC Youth League spokesman Floyd Shivambu says commercial banks only create an indebted black middle class. Photo: Leon Nicholas

What about all the corruption in the African Bank.....?