Greater focus on the role of the financial sector in achieving inclusive economic growth

Isaac Ramputa, CEO of Financial Sector Transformation Council.

In a bold move aimed at placing greater focus on the role of the financial sector in achieving inclusive economic growth, the governing body of the Amended Financial Sector Code (FSC), which came into effect on 1 December 2017, has expanded its mandate and assigned the most senior leaders of its constituents to strategically drive the sector’s black empowerment goals.

The Amended FSC provides the financial sector with a clear roadmap on how to build on existing achievements in black economic empowerment to the benefit of all stakeholders. The FSC is also the framework against which the empowerment progress of the financial sector is measured.
 
Announcing the FSC’s newly reconstituted and renamed governing body – the Financial Sector Transformation Council (previously the Financial Sector Charter Council) - in Johannesburg today, CEO Isaac Ramputa said the changes will ensure that transformation of the financial sector is driven with greater urgency by executive decision makers.
 
According to Ramputa the financial sector has a crucial role to play in achieving a sustainable, inclusive and growing economy in South Africa. He adds that this can only be achieved effectively through the accelerated transformation of the financial sector.
 
The expanded mandate of the Financial Sector Transformation Council (the Council) aims to provide greater strategic direction to the financial sector on transformation and development initiatives that support economic growth and job creation. These include:

• The funding and implementation of transformational infrastructure projects;
• The funding and development of black business in general and black industrialists in particular;
• Support for small black businesses through Enterprise and Supplier Development (ESD) and preferential procurement;
• Public Private Partnership (PPP) projects to fund higher education; and
• Increasing financial inclusion and consumer financial literacy levels.
 
Unveiling the reconstituted Council
 
The Amended FSC is the product of extensive consultation spanning many years involving a number of constituents: the labour and community constituencies of the National Economic Development and Labour Council (Nedlac), business as represented by its financial sector trade associations, Government as represented by the Department of Trade and Industry, National Treasury and the Presidency, and the Association of Black Securities and Investment Professionals (ABSIP).
 
Ramputa said these constituents agreed that in order for the Council to achieve it expanded mandate, the first important step would be to include their top leaders in the structure of the Council.
 
“Their role will be to give strategic leadership and direction to the financial sector to impact further transformation across the sector and the role that it plays in supporting economic growth,” he explained.

Monitoring transformation
 
Ramputa points out that in addition to its new mandate, the Council also plays a governance and oversight role.
 
The Council Executive, the Council Technical Committees and the Secretariat are tasked with ensuring that the Council effectively monitors the transformation efforts of the financial sector through the collection and collation of annual industry reports.
 
According to Ramputa the financial sector has three months left in which to prepare for the implementation of new empowerment financing targets which will come into effect on 1 January 2019.
 
The financial sector will be expected to report on progress made against the new targets in 2019. The first Financial Sector Transformation Scorecard against the Amended FSC is expected to be finalised by April 2019.