Pension funds investment important for economic growth, says Mashatile

Deputy President Paul Mashatile says it is important to ensure pension funds investments are used for economic growth and development.

Deputy President Paul Mashatile. – Image: GCIS.

Mashatile addressed the winter conference of NPO Batseta, the Council of Retirement Funds of South Africa, on Monday.

“We accepted the invitation to engage you because government alone will not resolve the challenges in the economy. We believe by working with you we can build an inclusive and sustainable economy that grows at much higher levels than now,” he said.

Mashatile noted the topics for the conference discussions included climate change, energy and just transition and smart use of investment funds.

“These topics demonstrate your commitment to finding lasting solutions in the economy,” he said.

Over the past 29 years, government had adopted policies that contributed to the transformation of the economy.

“The policy interventions have resulted in the transformation of key sectors of the economy and society. However, we are concerned the economy is not growing at a rate that results in many [people] being absorbed by the economy.”

According to Stats SA, the economy contracted 1.1% in the fourth quarter of 2022 but GDP expanded by an estimated 0.4% in the first quarter of 2023 (January to March).

‘The manufacturing and finance industries were the major drivers of growth on the supply side. The demand side was lifted by exports, with smaller positive contributions for household, government and investment spending,” he said.

“The economic reconstruction and recovery plan, announced by President [Cyril] Ramaphosa in October last year remains our lodestar to a new inclusive economy. Our goal is to break with an economic trajectory characterised by low and declining growth.”

Government wanted to expand social and economic infrastructure to meet the needs of the people.

“This includes new investments in energy, mining, water and sanitation, roads and bridges, human settlements, health and education, digital infrastructure and public transport. Maintenance of existing infrastructure is also an important part of our rollout programme.”

Infrastructure investment was a key driver of reconstruction and recovery.

“Our challenge remains execution. This is where co-operation with the private sector will be critical. This does not preclude the business sector from identifying priority projects that will have a major contribution to the achievement of our shared goals,” he said.

As part of its economic reconstruction and recovery plan, government is implementing structural reforms under “Operation Vulindlela”, a joint programme between the National Treasury and the Presidency.

“In addition to Vulindlela, we need to look at new areas of ensuring ease and reducing the cost of doing business. The journey of structural reforms must touch every level of government. For example, rezoning regulations conducive to a friendly investment environment,” he said.

Reforms are not only about facilitating ease of doing business but also about transforming how the state does business.

“The state must be an enabler. It must enable South Africans to go about their daily lives. The state must build a better [life] for all. We collect taxes from South African citizens to make their lives better. We also have a duty to allocate [taxes] efficiently and spend effectively.

“We are looking forward to the outcomes of this winter conference and we will incorporate them into our plans as we seek to build a growing and inclusive economy,” Mashatile said.

The conference began on Monday and ends on June 13.

Sisanda Mbolekwa, Politics reporter