The EFF‘s Banks Amendment Bill misdiagnosed South Africa‘s sluggish economic transformation, according to Land Bank executive manager of agricultural economics, Litha Magingxa.
Magingxa said he was mystified by Economic Freedom Fighters MP Lloyd Shivambu‘s bid to see the law allow for establishment of a state bank. This would not necessarily aid economic transformation, Magingxa believes.
Magingxa was speaking at a land debate held by the University of Stellenbosch Business School on Thursday morning, which also included Advocate Tembeka Ngcukaitobi, and Institution for Poverty, Land and Agrarian Studies (PLAAS) researcher Ruth Hall.
Shivambu drafted amendments to the Banks Act of 1990, to allow the state the power to incorporate a bank that would be empowered with all the functions of a commercial finance services institution, with a view to driving economic development and transformation.
In an opinion piece for Daily Maverick, Shivambu said the Banks Amendment Bill was geared towards allowing government to establish various finance institutions to drive transformation of the financial services sector and the economy at large.
Magingxa said he is wary of the thinking that South Africa needs more institutions to transform its economy. He said the burden of nursing another institution to capacity would detract from using existing resources to drive development.
“This idea of creating a bank – what is it really for? Do we really need another institution? The challenge in various institutions that seek to drive change is capacity. If you direct the resources towards what you already have, there is a lot that you can achieve,” said Magingxa.
Magingxa said the South African agricultural sector has assets valued in excess of R400bn and that these would be in jeopardy if government acts recklessly in regulation, in a bid to expedite economic transformation.
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