Govt to establish sovereign wealth fund, state bank - Ramaphosa

President Cyril Ramaphosa said further details on the establishment of the two entities would be announced by Finance Minister Tito Mboweni when he delivered his Budget speech on 26 February.

Picture: pixabay.com

JOHANNESBURG – Government has heeded Auditor-General Kimi Makwetu’s call to take urgent action against exorbitant government spending and prevent the mismanagement of public funds.

In his State of the Nation Address in Parliament on Thursday, President Cyril Ramaphosa admitted that government was not generating enough revenue to meet its expenses and that its debt was heading towards unsustainable levels.

“By working with the Auditor-General to reduce irregular expenditure, by shifting government spending from consumption expenditure to investment in infrastructure, we aim to improve the state of public finances.”

He told the House a sovereign wealth fund would be established to “preserve and grow the national endowment of our nation, giving practical meaning to the injunction that the people shall share in the country’s wealth”.

The fund, according to Ramaphosa, would be accompanied by the establishment of a state bank.

Ramaphosa said further details on the establishment of the two entities would be announced by Finance Minister Tito Mboweni when he delivers his Budget speech on 26 February.

In August last year, Mboweni unveiled National Treasury’s economic strategy document titled Economic Transformation, Inclusive Growth and Competitiveness.

The document aims to boost economic growth by between 2% to 3% and create one million additional jobs through the implementation of various economic and labour reforms.

The president said: “Government will undertake far-reaching economic reform measures and we will include those contained in the paper by National treasury.”

He also said the National Treasury and the South African Reserve Bank were working together to ease pressure on business and consumers.