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IOL News
5 hours ago
- Business
- IOL News
Treasury sets the stage for infrastructure overhaul with R1. 8bn credit guarantee vehicle
Deputy Minister of Finance David Masondo said on Thursday that the government has committed to injecting an initial R1.8 billion into a newly established Credit Guarantee Vehicle, with plans to escalate the total investment to R9bn if needed. Image: Supplied The National Treasury has taken a step towards addressing South Africa's staggering infrastructure gap, which is projected to reach around R3.5 trillion to R4trln by 2025. Deputy Minister of Finance David Masondo said on Thursday that the government has committed to injecting an initial R1.8 billion into a newly established Credit Guarantee Vehicle, with plans to escalate the total investment to R9bn if needed. Speaking at the launch of the pre-qualification process for Independent Transmission Projects (ITP), Masondo highlighted the urgency of the situation. He noted that at least 32 development partners have expressed interest in investing in the new scheme, which aims to rally private capital to bridge the nation's infrastructure financing gap. "Formal engagements with participating partners are continuing and will lead to the delivery of conditional equity participation commitment letters in the third quarter of 2025," Masondo said. "This will enable the Credit Guarantee Vehicle to be operationalized by July 2026 to align with the first phase of ITP projects." He said the infrastructure gap called for scaling up of public financing as well as crowding in private capital through public-private partnerships (PPP). "The objective of the Credit Guarantee Vehicle is to mobilize and leverage private capital to address South Africa's infrastructure financing gap by mitigating offtake risk for private investors," Masondo said. "This vehicle will also support the efficient deployment of development partner funding under the Just Energy Transition Partnership (JETP) and the achievement of the country's decarbonisation commitments." Masondo said while the Credit Guarantee Vehicle will focus on the initial phase of enabling investments in transmission infrastructure, it will be expanded into other areas such as logistics and water over time. "The vehicle will be incorporated as a private company in South Africa, regulated by the Prudential Authority. It will operate as a standalone entity with an independent balance sheet and will target a minimum credit rating of AAA," he said. "A professional executive management team and board of directors with relevant experience and expertise will be appointed to operate and manage the fund. The Credit Guarantee Vehicle will issue a combination of payment and termination guarantees to a Special Purpose Vehicle established for the project." Speaking at the same occasion, Electricity and Energy Minister Kgosientso Ramokgopa said the proposed amendments to the Integrated Resource Plan (IRP) 2019 anticipate the onboarding of more than 30GW of renewable energy by 2030 and approximately 56GW of new connections by 2035. "That's an aggressive programme. For that to happen you really need the transmission infrastructure to be in place," he said. "Major players in the renewable space will tell you 53GW of private sector sponsored projects that are waiting for this connection are at various stages, but its just an indicator of the insatiable appetite that exists in the private sector." In this context, he discussed the initial phase, which encompasses 1 164 kilometers with a capacity of about 2 600 MVA, projecting that unlocked renewables could produce an impressive 3 322 megawatts. He acknowledged that Eskom had historically delivered around 350km per annum, but stressed the necessity to scale up infrastructure development. "It's about the maturity and readiness of local industry because we have not done a significant build programme over a continuous uninterrupted period. We have undermined the capacity of industry to respond to opportunities of this scale," Ramokgopa said. "That is an immediate risk that's facing us that's why we will be engaging with the industry to see how best they are ready and of course build up that capacity over time." BUSINESS REPORT
IOL News
23-07-2025
- Business
- IOL News
National Assembly passes Appropriation Bill amid opposition objections
The Appropriation Bill easily mustered majority with 262 votes against 90 votes. Image: Ayanda Ndamane / Independent Newspapers The National Assembly on Wednesday passed several departmental votes despite objections from the opposition parties during a marathon session at the Cape Town International Conference Centre. This was after the first reading of the Appropriation Bill was passed, paving the way for the approval of the full schedule of votes for 42 departmental and entities and the second reading of the Bill. The Bill easily mustered a majority with 262 when the ANC, the DA, IFP, Patriotic Alliance, Freedom Front Plus, ActionSA, UDM, Al-Jama-ah, Build One South Africa, Rise Mzansi, GOOD, and PAC voted in favour. The MK Party, EFF, ATM, National Coloured Congress, and United African Transformation voted against, with a combined 90 votes. The Presidency was the first budget to be voted for, followed by Parliament, and then the other departments and entities. As voting continued, individual departmental votes were each passed despite the EFF and MK Party consistently asking for the division of the House. Speaking during the debate, Deputy Minister for Finance David Masondo called on the parties to pass the Budget to allow the national government to spend R1.23 trillion to deliver services to protect the vulnerable and invest in the country's shared future. Masondo warned that the absence of the Appropriation Bill will mean that the government may only spend 45% of the previous year's Budget until the end of July, and thereafter 10% of the previous Budget. 'Our estimation overall by October is that the government will be without authority when we reach 100% of last year's appropriation,' he said. He also said failure to pass the Budget would delay critical priorities of the government. 'We should not prolong or object to the passing of this Bill. It is ultimately the most vulnerable members of society who depend on grants, public schools, and clinics who will suffer the most due to our inactions,' Masondo said. Build One South Africa and Standing Committee on Appropriations Chairperson Mmusi Maimane said the Budget was passed in severely constrained economic conditions. 'Our inherent problem is a problem of growth. As our economy is not growing, it means we have fewer resources to be able to redistribute to our citizens,' Maimane said. He called for improvements in the Budget process to give effect to the timelines of the Money Bill Act. 'I want to urge going into the next cycle to ensure we establish our priorities that we are clear with economic reform, we budget accordingly, and ensure the Budget process is smoother and people of South Africa can experience fullness of participation in the Appropriation Bill,' Maimane said. MK Party MP Sanele Mwali said it was disheartening that the country fell apart and the government prescribes the same economic, fiscal, and monetary policy, which failed to bring change and impoverished millions of citizens. 'Economic stagnation and high unemployment with obsession with debt reduction at the expense of investment and growth, and stimulate new economic activity,' Mwali said. DA MP Kingley's Hope Wakelin spoke against the R700m budgeted for the upcoming National Dialogue, saying the money could be used for tangible projects such as RDP houses, a job-seekers' grant, and free basic electricity for the indigent. 'The people do not want to see R700 million wasted on another expensive dialogue,' he said. He also said spending reviews should be implemented, an exercise that should look beyond reworking the Budget but eliminate duplications, and stop underperforming programmes and political vanity projects. 'These reviews should form part of the 2026 Budget planning,' he said. EFF MP Omphile Maotwe rejected the Appropriation Bill, saying some members of 'the gang unit' were happy to be in government to enjoy the gravy train and were not caring about the country's future. She accused some in the Government of National Unity who previously opposed the same Budget every year. IFP chief whip Nhanhla Hadebe said they were concerned that the allocations did to go far enough to address challenges facing the people. 'While we commend the National Treasury to contain expenditure and limit debt service cost, fiscal consolidation must not come at the cost of service delivery,' Hadebe said. Rise Mzansi MP Songezo Zibi observed that the Budget was not perfect and that South Africans wanted the government and Parliament to work on the available fiscal envelope. Zibi said the executive and Parliament should begin to make choices and prioritise programmes that were more important than others. 'Programmes that support economic growth and employment, safety, health, and education in modern skills are obviously a priority, but even those must be thoroughly examined for effectiveness,' he said, adding that programmes that can't produce evidence of sustainable impact must be reviewed and changed or stopped altogether. The vote on the departments' voting was continuing in the evening after 7pm. [email protected]
Eyewitness News
23-07-2025
- Business
- Eyewitness News
Failure to finalise budget will hurt SA's vulnerable members of society the most
JOHANNESBURG - Deputy finance minister and African National Congress (ANC) MP, David Masondo, said that political squabbling over the budget would come at a high price for service delivery. Masondo's warning about the impact on South Africans comes as MPs prepare to vote on the Appropriation Bill in the National Assembly on Wednesday afternoon. If it passes, it will bring to a close four months of an intense back-and-forth between parties over government's spending plans. ALSO READ: • Budget 2025: MK Party, EFF call Appropriation Bill anti-poor • Parliament's Appropriations Committee stresses importance of economic growth to support social wage • Steenhuisen: DA will support Appropriation Bill • Parliament preps for possibility & implications of national budget not being passed Masondo said that failing to finalise the budget would hurt the vulnerable the most. In budget 3.0, National Treasury focused on plans to address the persistent spending pressures to restore critical frontline services and invest in infrastructure. This is part of a broader plan to improve access to basic services and turn the economy around. The delays in tabling the budget and voting in favour of it mean that from August, government will only be able to spend 10 percent of the previous year's appropriation budget per month. Deputy Finance Minister David Masondo: "Our estimation is that by October 2025, the government will be without authority when we reach 100% of last year's appropriation." He said that the cost to service delivery was insurmountable. "We should not prolong the passing of this bill because ultimately, it is the most vulnerable members of society who depend on grants, public clinics and schools who will suffer the most." The EFF and MK Party are expected to vote against the Appropriation Bill, while ANC and DA MPs are expected to vote in favour of it.
IOL News
23-07-2025
- Business
- IOL News
Urgent call from Deputy Minister Masondo: Pass the 2025/26 Budget to protect vulnerable South Africans
Deputy Minister of Finance David Masondo warns that it will ultimately be the most vulnerable members of society who will suffer the most when the Budget is not passed by Parliament. Image: GCIS Deputy Minister of Finance David Masondo on Thursday called on parties not to prolong the passing of the 2025/26 Budget or vote against the Appropriation Bill. Speaking during debate on the first reading of the Bill, Masondo said the passing of the Bill by Parliament will allow the national government to spend R1.23 trillion to deliver services to protect the vulnerable and invest in the country's shared future. 'This R1.23 trillion is not just a number. It represents school meals, hospital beds, social grants, and infrastructure projects that will directly impact the lives of many South Africans,' he said. Masondo made the statement as MPs debated the Appropriation Bill as part of the process to pass the overall Budget with each of the departments' votes and schedules. 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Next Stay Close ✕ The debate centres on whether parties agree with the overall principles of the Bill, and should the National House vote 'no', the entire Bill will be deemed rejected and will be referred back to the standing committee for further consideration. Masondo said the absence of the Appropriation Bill will mean that the government may only spend 45% of the previous year's budget until the end of July, and thereafter only 10% of the previous budget. 'Our estimation overall by October is that the government will be without authority when we reach 100% last year's appropriation." He also said failure to pass the Budget would delay critical priorities of the government. 'We should not prolong or object to the passing of this Bill. It is ultimately the most vulnerable members of society who depend on grants, public schools, and clinics, who will suffer the most due to our inaction,' Masondo said. However, the two big parties outside the Government of National Unity (GNU), the EFF and MK Party, indicated earlier that they will vote against the Appropriation Bill. Some of the small parties have stated that they will vote in principle in favour of the Bill, but just against some of the individual votes of departments. MK Party's Sanele Mwali said there was no time for technicalities but a focus on bold and courageous measures. Mwali said Finance Minister Enoch Godongwana, the GNU, and the ANC missed the opportunity to redefine the economic trajectory and set South Africa on a new path of sustainable growth and development. 'When we debate budgets, there is an attempt to limit Parliament from exploring other available economic alternatives,' Mwali said. He said the government continued to pursue the same economic, fiscal, and monetary policy that failed to bring change and impoverished millions of people. EFF MP Omphile Maotwe said her party made proposals on all department votes. 'We did not come to play internal coalition games but to make sure the voices of communities are heard in this House,' Maotwe said. She said the Budget was not for transformation, redistribution, or to fight unemployment, poverty, and inequality. 'It is a compromised Budget negotiated in smoke-filled backrooms to keep a sinking coalition afloat,' Maotwe said. ActionSA's Alan Beesley said the Budget was supposed to focus on industrial development, but it allocated crime to the very departments. Beesley also said Appropriation Bill lacked vision, coherence, and urgency. He complained about money being lost to corruption, cadre deployment, and bloated bureaucracy. 'There is enough money to run this country well, but there is not enough to run a bloated Cabinet and feed the greed of ANC comrades,' Beesly added. When the Bill was put to a vote, it easily secured the majority votes. This after the ANC, DA, and other parties voted in favour of it with 262 votes, while the EFF, MK Party, ATM, National Coloured Congress, and United African Transformation garnered 90 votes. This means the Bill has passed the first hurdle for the day. The parties are busy making declarations on each of the department votes before the approval of the full schedule of votes and the second reading of the Bill later this afternoon.
IOL News
22-07-2025
- Business
- IOL News
PIC grilled over R1. 7bn Daybreak support
Daybreak Farms has become emblematic of some of the challenges facing the PIC's unlisted investments portfolio during a period of heightened public scrutiny. Image: NSPCA THE Public Investment Corporation (PIC) faced intense scrutiny in Parliament last week over its handling of high-risk unlisted investments, including a hefty bailout of the embattled poultry giant Daybreak Farms. South Africa's largest asset manager of public funds was on the backfoot, defending its decision to inject more than R1.7 billion into Daybreak Farms, a vertically integrated poultry business on the brink of liquidation. Daybreak has become emblematic of some of the challenges facing the PIC's unlisted investments portfolio during a period of heightened public scrutiny. At the heart of the inquiry was Deputy Minister of Finance Dr David Masondo, who also chairs the PIC board. Accompanied by senior PIC officials and the new chief executive, Patrick Dlamini, Masondo sought to clarify the PIC's position amid growing public concern and media attention. Masondo explained that the PIC had committed R1.7bn to Daybreak, with R250 million injected earlier this year and an additional R150m for operational expenses in February 2025, designed specifically to stave off liquidation. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ He emphasised that 'the PIC board does not intend to keep injecting funds indefinitely; the business must turn itself around to survive the crisis'. The message was firm: while the PIC remains a key investor, the responsibility to deliver a viable recovery rests with Daybreak's management and board. Acknowledging governance failings, Masondo outlined the troubles: 'A board was appointed in 2021 but resigned the same year in May. A new board came in November 2022. Allegations surfaced regarding irregularities in the recruitment of Daybreak's chief executive. Investigations found violations of PIC and Daybreak policies as well as general recruitment procedures.' He confirmed these findings had led to resignations: 'Most of the board members involved in the irregular recruitment process resigned. The board was subsequently strengthened with experienced members.' Daybreak Farms is under business rescue, with a practitioner appointed and a rescue plan expected by August 22. Masondo stressed that liquidation must be avoided: 'The board believed strongly that liquidation should be avoided due to the company's importance to the economy, food security, and job preservation.' He explained PIC's limited direct operational role: 'We do not run the businesses but appoint directors to boards when necessary to support turnaround efforts,' with appointments made under strict policy and approved by the PIC's Directors Affairs Committee, chaired by Masondo himself. Masondo framed the Daybreak issue within the PIC's wider mandate. The asset manager invests on behalf of the Government Employees Pension Fund (GEPF), Unemployment Insurance Fund (UIF), Compensation Fund (CF), and others, with a stated goal to protect and grow workers' retirement and social benefit funds. He highlighted the PIC's growth since 2021: 'Assets under management grew from R2.3 trillion in 2021 to R3trln in March 2025, a 30% increase. Over the past 10 years, growth has been at 68%.' Regarding unlisted investments, which include direct equity ownership in companies such as Daybreak, growth was modest at best: 'The value rose marginally from R125bn in 2021 to R127bn in 2025, just a 1.4% increase.' This was attributed to UIF and CF suspending mandates over earlier concerns. Masondo also reiterated the PIC's commitment to balancing financial return with social and environmental considerations. He said: 'Since the beginning of its unlisted investment programme, PIC has created over 190 000 jobs.' The PIC reported that it had shared with Scopa a list of the 20 best-performing companies and 20 that had failed, confirming that 'most of the failed investments, including Daybreak, were made before the current leadership'. The one exception cited was Enable Capital, another troubled investment attracting media scrutiny. Meanwhile, Scopa members did not let the PIC off lightly on pensioner concerns. One member queried the contradiction between the PIC's reported average annual return of 15.9% and the only 2.3% pension increase awarded this year, which was noticeably below inflation. The discrepancy raised questions about the flow-through of investment returns to pensioners. Other areas debated included: Proposals for incentives to boost infrastructure investment The imperative to balance financial and social returns The PIC's reported impact on job creation, empowerment, and governance Calls for greater transparency and accountability within PIC's operations. Masondo assured Committee members that all recommendations from the Mpati Commission investigation had been fully implemented by March 31 this year. This included wide-ranging governance reforms and the creation of an ethics office aimed at promoting ethical conduct and reducing risks. Addressing recent media reports, he revealed: 'A senior PIC employee was alleged to have solicited a bribe. This matter was reported via our whistleblowing platform. The individual has since been placed on precautionary suspension pending investigation.' He confirmed that 'appropriate action will be taken based on the outcome'. Get the real story on the go: Follow the Sunday Independent on WhatsApp.
