Banks, state in another face-off

Aug 22, 2012 | Olebogeng MolatlhwaPolitical Reporter | 1 comments

THE government and the banking sector had another go at each other, at an event that was meant to bring the two sectors closer together.

DIGS: Nhlanhla Nene, Cas Coovadia, Sizwe Nxasana. PHOTO:VELI NHLAPO.

Tuesday's summit - hosted by the Banking Association South Africa (Basa) in Rosebank, Johannesburg - was meant to address the gulf that exists between the public and private sectors about the funding of the government's R3,2 trillion infrastructure programme.

Currently the government has had to rely mainly on the fiscus to fund its infrastructure projects, but yesterday both parties agreed that the private sector had a role to play. The government said it "cannot build everything because resources are limited".

Both parties agreed that a "hybrid finance model", in which the public and private sectors pitched in, was preferable.

But this conclusion was not arrived at before both parties - represented by Deputy Minister of Finance Nhlanhla Nene on the one hand, and Basa MD Cas Coovadia and deputy chairman Sizwe Nxasana on the other - took subtle digs at each other.

Yesterday's exchange comes after Sowetan reported that banks were unhappy with what they believe to be government's encroachment on their territory. Banks raised concerns about policy uncertainties in the run-up to the ruling party's national policy conference in June.

In a document submitted to the ANC before the conference, financial institutions demanded a stake in infrastructure projects but also demanded that the government know its place.

Nene criticised banks for what he said was their tendency to think short-term.