Buy one of SA’s banks, Tito Mboweni tells government

2014-07-30 08:47

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Government should consider buying one of the country’s banks to boost access to finance for citizens and businesses, former SA Reserve Bank governor Tito Mboweni has said.

“Any one of the existing banks” should be considered, Mboweni (55) said in an interview 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.”

President Jacob Zuma has promised radical economic transformation over the next five years to create jobs and spread wealth to the black majority who still lag behind whites two decades after the end of apartheid. The government can’t bring significant change without access to capital, Mboweni said.

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 cited examples of small, black-owned businesses being denied loans for projects.

“A state development bank doesn’t mean 100 percent owned by the state, but it must be majority owned by the state because you want the determination of policy direction to be in line with your goals,” Mboweni said.

China has state-owned banks, its “not impossible,” he said. “You need scale. You need quantum.”

Mboweni, declined a nomination earlier this year for a seat in Parliament to instead 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 public office in the future.

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