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South Africa’s ruling party has proposed using surplus state unemployment and compensation funds to help bail out the country’s debt-ridden power company, drawing ire from unions.
In discussion papers released late last week, the African National Congress said that the Unemployment Insurance Fund and the Compensation Fund had combined a surplus of R225 billion ($ 15 billion) in 2019.
Instead of investing this in publicly traded companies and government bonds, it should be used for “economic reconstruction,” the party said. The Eskom energy company has a debt of 484 billion rand.
“Companies and workers would agree that social security funds could be used responsibly to address social and economic needs, in particular to deal with Eskom,” the ANC said. He also said the funds could be used to help finance industry and improve education.
The proposal, which ties in with previous calls to use civil servants’ pension funds to reduce Eskom’s debt, has encountered opposition from unions, which are key allies of the ANC and have criticized the government for mismanagement. and corruption in the utility company.
Virus approach
“The focus of the Unemployment Insurance Fund at this juncture has to be on leveraging all the resources it can to help the millions of workers who have lost wages and jobs” as a result of the coronavirus, the South African Congress of Trade Unions said in a response. to consultations.
“He cannot afford to continue to carry the nation on his shoulders alone.”
The 1.8 million-member union federation, South Africa’s largest labor group, has asked for more help from commercial banks to fuel the stagnant economy and help Eskom instead of relying solely on workers’ contributions.
“It is essential that workers determine where their funds are invested,” said Cosatu.
The FIU has used part of its surplus to compensate workers who lost their jobs as a result of the impact of the virus outbreak. Business Day newspaper previously reported on the ANC’s proposal.
Read: Eskom wants to ‘name and shame’ residents for non-payment
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