# Savings industry asks government: Stop the threats, start the big projects

- Link: https://dearsouthafrica.co.za/2019/09/18/savings-industry-asks-government-stop-the-threats-start-the-big-projects/
- Published: 2019-09-18T13:48:13+02:00
- Author: dearSA

![](https://cdn.dearsouthafrica.co.za/wp-content/uploads/2019/09/20191242/Screenshot-
2019-09-18T134658.607.png "Savings industry asks government: Stop the threats, start
the big projects")

South Africa’s R2.4 trillion savings industry has a request for the ruling party:
stop with threats of dictating where funds must invest and get going on projects
that pensions can help finance.

“You can prescribe, but nothing will happen unless you have proper projects,” Leon
Campher, the chief executive officer of the Association for Savings and Investment
South Africa, an industry body of fund managers and insurers, said in an interview
in Johannesburg. “The savings industry would gladly invest in infrastructure or 
developmental projects provided they are properly done.”

President Cyril Ramaphosa last month echoed the election manifesto of the African
National Congress saying a discussion was required to investigate the use of prescribed
assets as a tool for fostering economic growth. A lack of detail on how retirement
funds could be forced into investing in state-owned companies or government projects
has stoked concerns it could leave pensioners poorer if these don’t make inflation-
beating returns.

There has been very little visible progress since Ramaphosa last year announced 
that the government would create a multi-billion rand infrastructure fund. Banks
and even Ramaphosa’s envoys appointed to lure investment into the country have complained
over a [dearth](https://www.bloomberg.com/news/articles/2018-10-26/cash-rich-banks-seeking-growth-see-dearth-of-s-africa-projects)
of projects that has led to the near demise of South Africa’s [construction](https://www.bloomberg.com/news/articles/2019-03-12/group-five-collapse-signals-south-african-construction-demise)
industry.

“If it’s funding for developmental projects South Africa is after, government would
be better off ensuring that the infrastructure initiative proposed by the president
in his fiscal stimulus plan a year ago gets going,” Campher said.

### Joint Effort

The association and banking industry are working with the Development Bank of Southern
Africa to flesh out details of an infrastructure initiative, Campher said, adding
that DBSA has indicated it could be up and running by the end of this year. The 
lender didn’t immediately respond to requests for comment.

“The concept is that you have the government pot, the DBSA pot and you have got 
the savings pot so you can create what is called a blended-finance model,” he said.“
Recruiting retired and semi-retired technical experts, people with the appropriate
skills, to prepare projects will be important for attracting funding.”

The government could base the model for its infrastructure fund on its highly successful
Independent Power Producers renewable-energy program, Campher said, adding it could
be expanded beyond energy to form a “project office on steroids.”

Big-ticket items for funding could also include initiatives in the areas of water
and sanitation, broadband and student accommodation, Campher said.

If prescription is introduced, there is a good chance that R2.5 trillion in foreign
capital invested in South African equities could flow out of the country, he said.

[Article](https://m.fin24.com/Economy/savings-industry-asks-government-stop-the-threats-start-the-big-projects-20190918)
by Roxanne Henderson & News24