State bank can help sort financial mess

SOUTH Africa’s public finances are in a hazardous state, with our public debt sitting at R3 trillion, according to the SA Reserve Bank.

Consumer debt stands at R1.7 trillion, with the World Bank revealing that 25 million South African adults owe money to financial institutions and corporate lenders.

The 2017 report by the South African Human Rights Commission has described more than 11 million credit active South Africans as dangerously over-indebted.

This calls into question the efficiency of our regulatory framework and of those who are entrusted with managing our economy.

We need a new approach. The government cannot continue to outsource its developmental agenda to the private sector. We need a state bank to focus on productive lending and to lend money at reasonable rates.

Regulatory institutions such as the Reserve Bank can make it easier for emerging small- to medium-sized economic players to enter the financial services sector. The National Treasury should place restrictions on bank charges and there should be a government policy to set aside certain markets for small businesses, particularly in the rural economies and townships.

If one looks at townships and the rural economy, one will find money is not being lent out at fitting rates to small businesses. These businesses, are being immobilised.

The issue of having a state bank is long-overdue. This should be a critical financial sector transformation.