Prescribed assets: Is SA going to throw the retiree out with the bathwater?

South Africa is poised to throw the baby out with the bathwater by prescribing assets – even more than currency – to ensure that the state-owned enterprises are bailed out with public and private pension money. Or is it? Economists Mike Schussler, of Economists.co.za and Ian Cruickshanks, of the IRR believe earnestly that this is the way the ANC government is heading, but JP Landman, the Nedgroup Private Wealth political economy analyst, says there is no way this is going to happen – there is plenty money in the local and international market to mop out the withdrawals by foreign investors. Pan African Investment and Research Services chief executive Iraj Abedian agrees with Landman, and says he would be "shocked out of his boots" if Tito Mboweni goes along with it. Donwald Pressly looks at the debate.

By Donwald Pressly*

President Cyril Ramaphosa has made it clear that he supports the resolution taken at the 2017 elective ANC conference for prescribed assets on pension funds to be "investigated". Enoch Godongwana, the head of the ANC's economic transformation sub-committee has also proposed that the country considers using private and public pension funds to bail out struggling state-owned enterprises – and to avoid an International Monetary Fund bailout.

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