KwaZulu-Natal unleashes first-of-its-kind public wealth fund

KwaZulu-Natal has unleashed a social wealth fund to stabilise the provincial economy and generate wealth for future generations.

The fund is modelled around the sovereign wealth fund that has been created in several countries as part of social upliftment, creating employment and growing the countries’ gross domestic products.

On Wednesday, the province held the Public Wealth Fund Conference to deliberate on the modalities associated with the implementation of the social fund.

Siboniso Duma, MEC for economic development, tourism and environmental affairs described the launch of the wealth fund as a game-changer, saying this is one of the ways to achieve the ideals of Freedom Charter.

“This fund will be at the centre of driving economy and creating an economic legacy for the province,” Duma said.

“This fund will not only address a lot of imbalances, but it will also minimise the strain on the national fiscus.”

Duma said in the interim, leveraging financial resources held under the Ingonyama Trust can be one of the ways used to fund the wealth fund.

This includes mobilising money in the provincial ports and the Richards Bay coal terminal, one of the busiest in the country.

Former finance minister Tito Mboweni first mooted the idea in 2020 when he said the country is looking at forming a sovereign fund with a starting capital of R30-billion.

“A sovereign wealth fund is an important long-term tool for saving and investment. It can also strengthen the fiscal framework,” said Mboweni at the time.

The provincial research entity, Moses Kotane Institute under the department of economic development, is tasked with undertaking a fact-finding mission on how the idea can be set in motion.

The delegates to the conference, who include academics, captains of industry and senior public servants, will also discuss the plan.

The wealth fund will be housed in Ithala Development Corporation, an investment wing of KwaZulu-Natal-based based Ithala Bank, which has also applied for a licence to be accorded the status of a state bank.

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