The due diligences on the establishment of a State-owned bank and a State-owned pharmaceutical company have been finalised, marking a step forward in Gauteng’s ambitions to establish the two State-owned entities.

The due diligence report for the State-owned bank has been handed over to the Gauteng provincial government.

“This is a major milestone that we have reached and gives the process of establishing the State bank a thumbs up. We are now in a better position to move to the next level to consult with the Premier and consult broadly with stakeholders including the Economic Development Department and labour,” Gauteng Finance MEC Jacob Mamabolo said on Thursday.

The establishment of the State-owned bank aims to address current market failures by integrating small, medium-sized and microenterprises and unserved individuals in the formal financial sector; driving financial inclusion and security while offering a differentiated value proposition to customers whose needs are not being met by current bank offerings; and providing tailored products including launching a streamlined, low-cost transaction product range with value-added features and expanding in future to include loan products.

“The due diligence report clears the legal hurdles and provides Gauteng with a strong legal framework towards establishing a State-owned bank. We are now in a better position to move forward knowing very well that the work that we are doing complies with the legislation,” Mamabolo assured.

The State-owned bank is one of the key mechanisms that can assist in expanding the township economy and increase the overall contribution of Gauteng to South Africa’s gross domestic product.

“We are convinced that by supporting township entrepreneurs, including ensuring that they have access to tailor-made financing products to expand their businesses, we will create new jobs, increase access to goods and services, and promote much-needed economic development in our communities.

Meanwhile, the legal due diligence for the State-owned pharmaceutical company has also been completed.

The due diligence supports the establishment of the pharmaceutical company, proposing a solution to address institutional arrangements, supply chain management, medicine procurement, facilities, distribution of medicines to the provincial healthcare facilities, medicines inventory and dispensary to members of the public.

An advisory panel of experts from both the public and private pharmaceutical and healthcare sector was established to provide strategic guidance and advice on developing a business case for the pharmaceutical company and participating in consultations with relevant stakeholders.

The panel comprises chairperson Amos Monyela and members Dr Harsha Somaroo; Dr Neelaveni Padayachee; Lize King; Professor Rudo Mathivha; Professor Sithembiso Velaphi; Saul Dikgang; Swasthi Soomaroo; Professor Sehlare Makgetlaneng; Dr Sebayitseng Hlatshwayo; Dr Zinhle Makatini; and Khamusi Philip Mutoti.

The panel will serve as an important mechanism for the proper regulation and oversight of the work to be conducted and will play a critical role in providing research and development support, disseminating proper information on medicines and addressing public health problems, Mamabolo said.

“In fact, we are meeting with the Health and Wellness MEC Nomantu Nkomo-Ralehoko and clinicians tomorrow as part of our first stakeholder consultation on the pharmaceutical company. The meeting will also be attended by Amos Monyela as the chairperson of the advisory panel of the pharmaceutical company.”

Senior counsel Advocate A Bham SC, senior council Ngwako Maenetjie SC and senior counsel Advocate Michelle Leroux SC were appointed to undertake the due diligence work on both the State pharmaceutical company and the State bank.

The due diligence for both entities cost R4.1-million.