Debate on the Public Investment Corporation Amendment Bill by Cde Peggy Nkonyeni in the National Assembly
26 February 2019
The most pressing task in 2019 is to set the economy on a higher path of shared growth, to create more jobs and provide opportunities for millions of South Africans. This requires levels of investment far beyond what has been achieved in recent years. As stated by President Ramaphosa, January 8th Statement.
The Public Investment Corporation (PIC) is a significant player in the South African economy, managing assets of over R2.083 trillion and still growing. The PIC's principles of environmental, social and governance (ESG) are in many ways aligned with South Africa's commitments to realisation of the Sustainable Development Goals (SDGs). PIC investment supports the expansion of small business, a key engine for driving economic development and job creation.
President Cyril Ramaphosa, delivering: the ANC January 8th Statement, the ANC manifesto, and the State of the Nation Address has made a commitment to turn the South African economy around for the benefit of all citizens. In the past year, President Ramaphosa, as promised, focused government efforts on accelerating inclusive growth, significantly increasing levels of investment and putting in place measures to create more jobs. He presented an economic stimulus and recovery plan that redirected public funding to areas with the greatest potential for growth and job creation. He also introduced a range of measures to ignite economic activity, restore investor confidence, support employment and address the urgent challenges that affect the lives of vulnerable members of our society.
These interventions provide the PIC with an opportunity to co-invest directly into the economy, in sectors that can create much-needed jobs. The PIC is mostly interested in the economic growth of South Africa, as the growth of its Assets under Management (AuM) is directly linked to that of the economy. The 2018 PIC Annual report demonstrate that there was investment growth of Assets under Management into the real economy. Continued investment in sectors with socioeconomic impact linked to NDP through Unlisted Investments amounted to a total of R18.55 billion. Most of these investments were in healthcare, manufacturing, affordable housing, energy and student accommodation projects among others.
As President Cyril Ramaphosa stated in his State of the Nation Address: The task of building a better South Africa is our collective responsibility as a nation. It is at the centre of the work of every department of government, of every agency and every public entity. It informs every policy, programme and initiative. The PIC has also made its contribution to this national imperative.
According to the 2018 PIC Annual Report, the PIC Social impact on education is:
* Number of student loans disbursed: 43,679
* Total number of student beds: 11,964
* Number of schools supported: 33
* Number of learners supported (basic education): 21,578
Social Impact on Employment:
* Total number of permanent employment opportunities sustained: 120,895
* Total number of temporary employment opportunities created: 12,664
* Employment Opportunities for the youth: 23,470
* Employment Opportunities for People Living with Disability: 400
The ANC government has changed many people's lives by providing them with houses and shelter. However, we acknowledge massive housing challenges that face South Africa and the much talked- about concept of the "missing middle", those are South Africans whose income is too high for them to qualify for government housing, yet cannot afford housing finance from the commercial banks. The ANC aims to change that reality for many South Africans, as in the amendment of the PIC Bill has called for the PIC to make available funding for housing for those within the "missing middle". The PIC is also looking at other innovative products that will benefit directly UIF and CC members.
The PIC has also made huge strides in developing financial products that directly benefit members their clients. In an effort to contribute to human settlement, making finance accessible for the missing middle, the PIC has already developed and are currently refining a housing product for the GEPF members and beneficiaries. Home ownership and decent shelter is a human right for all South Africans. Housing is an essential fixed asset that allow citizens to build their wealth as it provides an opportunity to borrow money to invest in education or to grow a small business. In other words, housing or home ownership are vital to building economic stability and even prosperity for our citizens and the next generation.
As stated by President Ramaphosa during the ANC January 8th Statement: "Across society, our people are embracing the 'new dawn' and demonstrate renewed commitment to equality, dignity and integrity exemplify this period of working together towards transformation of our society". The PIC is a transformed company, with a level 2 BEE rating and with 97% of its staff being black professionals. The PIC has a strong track record of investing in black-owned businesses through both investment activities and corporate procurement. At the corporate level, the PIC continues efforts to drive transformation and enterprise development support through procurement spend. PIC spends over 85% of procurement towards level 4 or better BEE companies, whilst approximately 98% of brokerage business (trading on the stock exchanges) is directed towards transformed stockbrokers who are 51% and above owned by black people. The PIC had over R100 billion allocated towards BEE asset managers by March 2018.
The importance of the PIC in stimulating economic growth cannot be emphasized enough. It is because of this crucial role that the ANC supports President Ramaphosa decision to institute a commission of enquiry on the PIC and amendment of the PIC bill to ensure good governance and also weed out corruption. The ANC believes that good governance is an integral component that marks the difference between a sustainable investment and a bad investment. The ANC will always champion the appointment of the right board of directors who in turn will put together a management team that will be able to properly implement strategy; manage risk and champion key social issues as well as environmental ones while creating substantial and sustainable wealth for all stake holders and enhancing overall economic growth.
I thank you