South Africa: towards the creation of a new state bank

The South African National Treasury has announced that it will continue with plans to introduce a new state bank. A tool that will essentially be put in place to help the most vulnerable populations in the country.

Speaking on this issue Tuesday, May 4 in the National Assembly, the Director General of the Treasury, Dondo Mogajane, indicated that the new bank was part of the structural reforms announced by President Cyril Ramaphosa in his post-Covid recovery plan. 19. The new financial institution should, he informs, help the poorest South African populations to find financing.

In addition, the person in charge deplores the delay of the project due to the slowness of the members of the committee. Dondo Mogajane also said that much of the technical work for the new bank is now complete, and that a memorandum has been prepared for the ministry that describes some of the possible forms the bank could take.

During the plenary session, two major proposals were made by parliamentarians. It is about abolishing the current Postbank and creating a new financial institution backed 100% by the state. But also to dissolve some of the country’s development finance institutions (DFIs), such as Ithala, into a single entity.

As a reminder, the head of state argued in February 2021 that the country’s banking sector is only controlled by a few banks. South Africans, he said, need more options to access loans.

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