Finance minister debacle cost PIC more than R99bn

Zuma watched as Desmond van Rooyen was sworn into office by Sisi Virginia Khampepe, a judge, at the Union Buildings in Pretoria, last December. (Waldo Swiegers, Bloomberg)

Zuma watched as Desmond van Rooyen was sworn into office by Sisi Virginia Khampepe, a judge, at the Union Buildings in Pretoria, last December. (Waldo Swiegers, Bloomberg)

The Public Investment Corporation (PIC) said on Tuesday that it lost R99 billion on the markets over two days in December after the finance minister, Nhlanhla Nene, was fired and agreed to disclose more details on its unlisted investment portfolio.

The PIC also disclosed that the Unemployment Insurance Fund lost R7 billion and the Compensation Fund R3 billion in the 48 hours after Nene was fired by President Jacob Zuma, replacing him with Desmond van Rooyen before bowing to pressure a few days later to bring Pravin Gordhan back to the key portfolio.

The admissions were made by the chief executive of the PIC, Daniel Matjila, before Parliament’s standing committee on finance, in response to a question from the Democratic Alliance’s David Maynier.

The PIC holds R1.8 billion in assets under its management and counts the Government Employees Pension Fund as one of its biggest clients.

Said Maynier: “This is a stark reminder of how much damage was done to pensioners’ savings and proof that President Jacob Zuma was dead wrong when he claimed the effect of his disastrous decisions was ‘exaggerated’ in South Africa.”

Later, Labour Minister Mildred Oliphant said the government’s investments with the PIC contributed to job creation. She was responding to suggestions that her department was not doing enough to combat unemployment. 

“In terms of investment, we have R1.8 billion through the PIC so that they can be able to assist those who want to establish businesses and to ensure that those businesses they support, create jobs,” she told a media briefing following her department’s budget vote debate.

Labour director general Thobile Lamati added that he wanted to “dispel the notion that the money with PIC is just sitting there” because the government received a return of roughly 5% on its investment and that some of the money was used to give sector-specific training to unemployed people and to assist entrepreneurs to run their businesses in a sound manner. 

— African News Agency

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