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Johannesburg – Investec Banking SA CEO Richard Wainwright has argued SA's ability to tackle transfer pricing, trade misinvoicing and illicit financial outflows is directly linked to the internal capacity of the SA Revenue Service (SARS).
“It’s fairly common knowledge that [SARS] institutional skill base needs to be rebuilt,” he said.
The Financial Intelligence Centre (FIC) estimates that nearly R60bn left the country illicitly in 2015/2016. Parliament's Standing Committee on Finance, meanwhile, has spoken out about the slow pace of curbing money illegally leaving the country.
Wainwright was responding to a question at a business breakfast on the first day of the ANC’s national conference in Nasrec.
The CEO also flagged the loss to the fiscus that would result if SA were downgraded by Moody’s Investors Service to sub-investment grade, commonly known as junk status.
“Up to 50% of our domestic bonds are owned by international investors, that’s up to R450bn. The real threat to the economy and the currency is if the foreign investors lose confidence [and if] South Africa falls out of the World Government Bond Index “, he warned.
Moody's kept SA at investment grade during its latest rating decision in late November.
At the time Moody's said it woud reassess SA sovereign credit rating early n 2018.
Business and government ties
Wainwright was answering questions after Finance Minister Malusi Gigaba argued that government and business ultimately have the same goals.
“The principles that business and Investec would support are the same - the number one priority is to get to strategic growth that would lead to jobs. We might just disagree about how to do that and what role the state should play,” said Wainwright.
He also shared some of Investec's frustrations with the state.
“We would like to see things done a lot quicker and would like to see us stop scoring own goals. Let me give you an example, The Youth Employment Service (YES) Campaign has been worked on for 18 months and we still can’t kick-start that," he said.
The YES campaign, which is a product of the CEO Initiative and government, promises to employ one million young people as interns over three years, giving them job experience and skills.
Wainwright said he'd asked Gigaba to try ensure the programme could begin urgently, calling it a “national strategic imperative”.
The Progressive Business Forum breakfast series will continues on Sunday with Minister of Trade and Industry Rob Davies set to speak.
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