A threat to economic stability

Dear Editor

The recent approval of the South African Postbank Limited Amendment Bill by the National Council of Provinces (NCOP) further entrenches unsustainable fiscal practices.

This Bill, which is now sitting on the President’s desk awaiting ratification, proposes the establishment of a new holding entity for the Postbank. This move is ostensibly designed to facilitate the Postbank’s registration as a Bank Controlling Company, enabling it to operate as a full-service bank.

This is a thinly veiled attempt to create another avenue for ANC members to exploit state resources.

As we approach the 2024 elections, the ANC’s desperation has become increasingly palpable. The Bill’s passage through Parliament was not a democratic process; it was a classic case of political strong-arming, driven by the ANC’s insatiable desire to expand its patronage networks and extract as much as possible before they potentially lose majority control.

The ANC’s argument for the necessity of a state bank is centred around the provision of financial services to SMME and economically disadvantaged entrepreneurs.

The party claims that a state bank would serve as a viable and affordable alternative to commercial banking institutions. However, this argument is deeply flawed.

Instead of wasting political capital advocating for a state bank, efforts should be channelled into creating bankable business opportunities, both within the state and private sectors.

Instead of wasting taxpayers’ money on a state bank, the ANC’s focus should be on creating an environment that nurtures up-and-coming entrepreneurs. If the Government were genuinely committed to supporting underprivileged entrepreneurial hopefuls, it would champion for a stable and conducive policy environment for small businesses.

This can be achieved by simplifying bureaucratic processes, enhancing service delivery, and implementing the much-vaunted government infrastructure spending plans, which could stimulate economic activity across multiple sectors.

Moreover, the government has failed to conduct a comprehensive feasibility study for the proposed state bank, arguing that such a study is not a legal requirement.

This refusal is a gross disregard for evidence-based policy-making and demonstrates the ANC’s unwillingness to confront the real challenges facing our economy.

South Africans have every reason to be sceptical of the proposed state bank. What we need are not new institutions, but focused, evidence-driven interventions to address our social and economic challenges.

It is therefore that the DA has remained consistently opposed to the creation of the state bank and will continue to resist this Bill.

The SAPO is currently under liquidation proceedings, which makes the President’s approval of this Bill even more concerning. We will therefore be writing to President Ramaphosa to urge him not to sign the Bill into law as its implementation will have catastrophic effects on our already fragile economy and exacerbate the hardships faced by South Africans who are struggling to make ends meet.

Regards

Dr Dion George MP
DA Shadow Minister of Finance