The Public Investment Corporation (PIC) would make developmental investments worth R70-billion in the next three to five years‚ which would drive economic growth and job creation‚ Deputy Finance Minister Mcebisi Jonas said in parliament on Wednesday.
Jonas said sectors of focus would be agriculture and agro-processing‚ mining and beneficiation‚ manufacturing‚ infrastructure and property‚ social infrastructure and renewable and conventional energy.
In addition‚ the PIC would allocate about R1-billion for investment in small and medium enterprises.
The PIC has R1.85-trillion in assets under management and acts as the investment fund manager for the Government Employees Pension Fund‚ the Unemployment Insurance Fund and other social security funds.
“These investments are expected to improve the risk profile of our client portfolios and deliver sustainable returns‚” Jonas said during the debate on the Treasury budget in the National Assembly.
DA finance spokesman David Maynier said during the debate that his party would be working hard to crack open the PIC and ensure that it was “fire-walled” from becoming a “corporate battering ram” and a “piggy-bank” for the governing party.
Last month‚ PIC chief executive Daniel Matjila and his team of executives told parliament’s standing committee on finance that the structure of the PIC’s investment portfolio would be adjusted because of its overexposure to JSE volatility.
Matjila said more focus would be given to developmental investments‚ property and unlisted investments.
The PIC’s listed domestic investments make up about 70% of its total portfolio‚ unlisted investments about 20%‚ and offshore investments about 10%.
PIC investments make up about 12.5% of the JSE’s market capitalisation and it holds 28% of the bond market capitalisation and 25% of South Africa’s government bonds.
Jonas told MPs that the PIC had allocated a further R5-billion towards job-saving in vulnerable sectors‚ such as mining‚ construction and manufacturing.
He noted that Matjila and Standard Bank chief executive Sim Tshabalala were co-chairs of a working group established by the government and the private sector to look at key investment projects in targeted sectors.
“This working group is aimed at getting government‚ labour and the private sector to identify a core set of priority economic sectors and enterprises‚” Jonas said.
The Development Bank of Southern Africa was playing an increasingly active role in financing municipal infrastructure and supporting economic growth‚ increasing its infrastructure support by 30% to R28-billion in 2015-16‚ from R21.4-billion the previous year.
Its support to the municipal market exceeded R8.2-billion in the past year and the bank had also assisted in the completion of 68 infrastructure projects.
“For the forthcoming year‚ the bank will seek to increase its project preparation support to R9-billion‚ while crowding in third-party funders to the value of R5.6-billion‚ and to increase project disbursements to over R16-billion‚” Jonas said.
He emphasised the need to expand co-operation between South Africa’s development finance institutions and private sector financial institutions to broaden investment in infrastructure and support partnerships in financing growth. — BDLive
State punts R70bn initiative to ramp up economic growth
Jonas said sectors of focus would be agriculture and agro-processing‚ mining and beneficiation‚ manufacturing‚ infrastructure and property‚ social infrastructure and renewable and conventional energy.
In addition‚ the PIC would allocate about R1-billion for investment in small and medium enterprises.
The PIC has R1.85-trillion in assets under management and acts as the investment fund manager for the Government Employees Pension Fund‚ the Unemployment Insurance Fund and other social security funds.
“These investments are expected to improve the risk profile of our client portfolios and deliver sustainable returns‚” Jonas said during the debate on the Treasury budget in the National Assembly.
DA finance spokesman David Maynier said during the debate that his party would be working hard to crack open the PIC and ensure that it was “fire-walled” from becoming a “corporate battering ram” and a “piggy-bank” for the governing party.
Last month‚ PIC chief executive Daniel Matjila and his team of executives told parliament’s standing committee on finance that the structure of the PIC’s investment portfolio would be adjusted because of its overexposure to JSE volatility.
Matjila said more focus would be given to developmental investments‚ property and unlisted investments.
The PIC’s listed domestic investments make up about 70% of its total portfolio‚ unlisted investments about 20%‚ and offshore investments about 10%.
PIC investments make up about 12.5% of the JSE’s market capitalisation and it holds 28% of the bond market capitalisation and 25% of South Africa’s government bonds.
Jonas told MPs that the PIC had allocated a further R5-billion towards job-saving in vulnerable sectors‚ such as mining‚ construction and manufacturing.
He noted that Matjila and Standard Bank chief executive Sim Tshabalala were co-chairs of a working group established by the government and the private sector to look at key investment projects in targeted sectors.
“This working group is aimed at getting government‚ labour and the private sector to identify a core set of priority economic sectors and enterprises‚” Jonas said.
The Development Bank of Southern Africa was playing an increasingly active role in financing municipal infrastructure and supporting economic growth‚ increasing its infrastructure support by 30% to R28-billion in 2015-16‚ from R21.4-billion the previous year.
Its support to the municipal market exceeded R8.2-billion in the past year and the bank had also assisted in the completion of 68 infrastructure projects.
“For the forthcoming year‚ the bank will seek to increase its project preparation support to R9-billion‚ while crowding in third-party funders to the value of R5.6-billion‚ and to increase project disbursements to over R16-billion‚” Jonas said.
He emphasised the need to expand co-operation between South Africa’s development finance institutions and private sector financial institutions to broaden investment in infrastructure and support partnerships in financing growth. — BDLive
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