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Public Investment Corporation’s policies anger unions

Cosatu says state pension manager must do more to reduce poverty.

South Africa’s largest labour group said it will step up pressure on the Public Investment Corporation, which manages the pension funds of teachers, nurses and other state workers, to invest more aggressively in infrastructure and other projects to alleviate poverty.

“We are not happy, to put it bluntly, with the forms of investment of our pension funds,”  Sdumo Dlamini, president of the 1.9-million member Congress of South African Trade Unions, said on Thursday in an interview at Bloomberg’s Johannesburg office. “Cosatu has consistently been raising concerns about how pension funds or retirement funds of workers are invested. Why don’t we see our monies being invested in areas where jobs are seen to be created?”

The Pretoria-based PIC oversees about R1.8 trillion ($123 billion), making it the country’s largest investor. Its equity investments account for about 12% of the market capitalisation of the companies that trade on the Johannesburg Stock Exchange. The Johannesburg-based union federation’s demands that the fund manager play a more proactive role in addressing poverty come at a time when 27% of the workforce is unemployed and the economy is projected to grow at the slowest rate since a 2009 recession.

Projects linked to the government’s planned National Health Insurance, which could include building hospitals, is an example of the kind of investment plan Cosatu would support, Dlamini said. 

“Most of their investments are in malls,” he said. “Malls are simply perpetuating profiteering by business people.”

‘Exporting Jobs’

Bheki Ntshalintshali, Cosatu’s general secretary, said in the same interview that there is a lack of transparency at the PIC and criticised the fund manager for investing outside of South Africa.

“When you invest offshore, in the language of workers that means you are exporting jobs,” he said.

Cosatu, which is in an alliance with the ruling African National Congress, plans to meet with PIC officials to try and persuade them to change their investment priorities and approach.

The PIC announced in May that it had set aside R70 billion to help foster growth and development, create jobs and give the black majority a bigger stake in Africa’s most-industrialised economy.

The PIC didn’t immediately respond to calls and an e-mail seeking comment.

© 2016 Bloomberg

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That’s the first sensible thing Cosatu has done in years. Why should the working class whose hard earned money sitting with PIC not see it put to better use. Infact Cosatu should force PIC to bring all those foreign invested funds to South Africa. It will make a huge impact on industrialising our economy and creating more jobs and they should have the greater say on where it is invested and not the fund managers who are profiteering from huge commissions for playing around with the hard earned money of the working class.

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