By Lehlohonolo Lehana.
Gauteng provincial government is still pushing ahead with its plans to launch a state bank and even a state-owned pharmaceutical company.
Gauteng Finance MEC Jacob Mamabolo confirmed on Thursday that due diligence work related to establishing a state bank and pharmaceuticals company has been completed, with both reports – which cost the province R4.1 million to compile – now in the hands of the provincial government.
This is a major milestone that we have reached and gives the process of establishing the state bank a thumbs up. We are now in a better position to move to the next level to consult with the Premier and consult broadly with stakeholders, including the Economic Development and Labour (Council),” Mamabolo said.
“The due diligence report clears the legal hurdles and provides Gauteng with a strong legal framework towards establishing a state-owned bank. We are now in a better position to move forward knowing very well that the work that we are doing complies with the legislation.”
The new state-owned bank aims to address current market issues by:
- Integrating small, micro, and mid-sized businesses (SMMEs) and unserved individuals in the formal financial sector;
- Driving a mission of financial inclusion and security while offering a differentiated value proposition to customers whose needs are not being met by current bank offerings;
- Provide tailored products, including launching a streamlined, low-cost transaction product set with value-added features and expanding to include loan products in the future.
“We are convinced that by supporting township entrepreneurs, including ensuring that they have access to tailor-made financing products to expand their businesses, we will create new jobs, increase access to goods and services, and promote much-needed economic development in our communities,” the MEC said.
“The state-owned bank is one of the key mechanisms that can support us to grow the township economy and increase the overall contribution of Gauteng to the country’s gross domestic product.
The pharmaceutical entity is supposed to address, among others, supply chain management, medicine procurement, distribution of medicines to provincial healthcare facilities, and medicine inventory and dispensary to the public.
Mamabolo confirmed the appointment of an advisory panel comprising experts in the pharmaceutical and healthcare industry.
This panel, chaired by Cosatu Gauteng chair Amos Monyela, is supposed to help the government develop a business case for the pharmaceutical company.
“The panel will serve as an important mechanism for the proper regulation and oversight of the work to be conducted and will play a critical role in providing research and development support, disseminating proper information on medicines and addressing public health problems.”
Meanwhile the Democratic Alliance (DA) in Gauteng has called on the provincial government to prioritise basic service delivery instead of establishing a state-owned bank and pharmacy.
The DA Gauteng spokesperson for finance Adriana Randall said the opposition party won’t be supporting the provincial government’s plan to establish a state-owned bank and pharmacy.
The party has sent questions to the provincial treasury asking whether government can afford to underwrite another State bank, considering the fact that the national government had already started work on establishing its own State bank.