THE African National Congress (ANC) in Gauteng is pushing for the creation of a state bank that would function like a commercial bank, to fund "radical economic transformation", provincial chairman Paul Mashatile said on Tuesday.

The ANC in Gauteng heads to its provincial elective conference this week where it is set to discuss policy proposals aimed at fundamentally transforming the South African economy.

Mr Mashatile, who is expected to be re-elected to his post at the upcoming conference, in an interview on Tuesday said the institutions such as the Industrial Development Corporation did not come close to providing the required finance to create black industrialists and transform the economy. "The state has to put a huge effort financially behind its transformation agenda," he said.

A number of key individuals including former Reserve Bank governor Tito Mboweni have called for the creation of a larger and deposit-taking state-owned bank. However, criticism has been that SA has a number of development financial institutions linked to the state.

These include the Industrial Development Corporation, Development Bank of Southern Africa, National Empowerment Fund, Land Bank, National Housing Finance Corporation, National Youth Development Agency and Small Enterprise Finance Agency.

The criticism has been that these development finance institutions need to work better before a state-owned bank is created. However, a counter-argument has been that the existing development finance institutions are disjointed and could be integrated to form one big state-owned bank.

The Gauteng ANC suffered a massive blow in the May 2014 election, with its majority slipping nearly 11 percentage points in the final results tally. It has admitted ahead of the conference that it had lost support among the middle class in SA’s most urbanised province.

Mr Mashatile said this bank should have the capacity of the country’s existing commercial banks, such as First National Bank or Standard Bank, to fund the agenda for a radical economic transformation, because a major barrier to entry to the economy for black business was finance.

The ANC took a decision to turn Postbank into a state bank and while this had a "wide footprint" through the now-ailing post office, the Gauteng ANC said the "sad reality" was that Postbank did not have the "requisite financial muscle".

The Gauteng ANC suffered a massive blow in the May 2014 election, with its majority slipping nearly 11 percentage points in the final results tally. It has admitted ahead of the conference that it had lost support among the middle class in SA’s most urbanised province.

The economy is set to take centre stage at the conference this weekend.

Mr Mashatile said the ANC members would discuss its proposal to ensure that 49% of the country’s mines were black-owned and that local beneficiation was lifted to more than 30%. "After 20 years of democracy, we cannot keep dillydallying about the entry of black people to the mainstream of the economy."

There was an opportunity for the state to use its muscle to create black industrialists by ensuring that they benefited from the massive infrastructure spend the government had committed to.

Mr Mashatile said a state bank financing black industrialists regarding major projects would also enable the country to break down monopoly capital.

The ANC in Gauteng is set to discuss electronic tolling, as well as the water crisis that hit Gauteng this month.

Mr Mashatile admitted that e-tolls had an effect on the party’s election performance, hence a review panel to examine the impact of the system was set up. "We are saying to the ANC, if our policies affect our people negatively, it could be reviewed and even scrapped," he said.

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