Ramaphosa: Not right time to set up sovereign wealth fund
President Cyril Ramaphosa says despite the country's precarious financial position, there are still plans to establish a sovereign wealth fund.
He told Parliament that while such a fund could benefit the economy, current priorities include reforming state-owned enterprises to ensure the fund's success in the future.
"At present, South Africa’s fiscal position with substantial current account and budget deficits is not favourable for the establishment of a sovereign wealth fund.
"Funding for service delivery remains under pressure. Additional resources are required to improve the recruitment of key personnel such as police and teachers. We also need to increase investment in the maintenance of basic service infrastructure.
READ: Transnet restructuring not move to privatise - Ramaphosa
"In light of these realities, the most appropriate policy path is to use any additional resources at this moment to reduce the debt burden and improve the delivery of services."
Ramaphosa said the government is working hard to resolve the crisis in the SOEs.
"We have a debt burden that has to be funded through the taxation process or borrowing. The sovereign wealth fund will be funded through dividends that will flow from our state-owned enterprise."
The President was answering questions in Parliament on Thursday afternoon, his first such appearance since the formation of the government of national unity.
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