Buy a bank - Tito Mboweni

By Drum Digital
30 July 2014

Former South African Reserve Bank governor, Tito Mboweni, said the government should consider buying one of the country's banks to boost access to finance.

Former South African Reserve Bank governor, Tito Mboweni, said the government should consider buying one of the country's banks to boost access to finance.

“Any one of the existing banks” should be considered, he said yesterday.

“It’s a huge amount of money involved, but you must think big, beyond the squatter camp, and then amalgamate that with all these development finance institutions,” he continued.

President Jacob Zuma has promised radical economic transformation over the next five years to create jobs and spread wealth to the black majority, which still remains the poorest and least developed.

Mboweni argued that  the government can’t bring significant change without access to capital.

The biggest banking groups in South Africa include FirstRand, Standard Bank, Barclays Africa and Nedbank.

The lender must be “a deposit-taking institution,” said Mboweni, who is a member of the ANC’s national executive committee.

“It’s a huge intervention and the advantage with acquiring one of the existing banks is that you have the infrastructure.”

Postbank, a state company linked to the Post Office that mainly distributes welfare payments, doesn’t have the infrastructure or the “muscle,” he said.

Mboweni said the country’s largest lenders aren’t doing enough to boost the investment needed to transform an economy molded by the apartheid government until 1994.

He declined a nomination earlier this year for a seat in Parliament as he preferred instead to focus on “economic transformation” through his Mboweni Brothers Investment Holdings.

A former labour minister in Nelson Mandela’s administration from 1994, Mboweni said he would consider returning to politics.

- CITY PRESS

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