VBS and the Quest for Radical Socio-economic Transformation
The recent furore around VBS Bank and the South African Reserve Bank (SARB) putting it under curatorship, after the bank accepted deposits from municipalities which it is not legally permitted to do under the Municipal Finance Management Act of 2003, brought to the fore the critical challenges that we are faced with as a country in our quest for radical socio-economic transformation aimed at bringing black people and historically disadvantaged individuals and communities into meaningful mainstream economic activity as well as transforming racially skewed ownership patterns that prevent our economy from growing in an inclusive manner.
In discussing this issue with a very close mate of mine who is in the financial services sector, notwithstanding the merits of the SARBs actions, we ended up focussing on the critical matter of how to transform the various sectors of our economy, which still remain largely owned and controlled by a few, large, elite firms across entire value chains. These firms, of course, for historically obvious reasons are mostly owned and controlled by white people (it wouldn’t be contemporary South Africa if every issue didn’t end up at some point boiling down to race would it?)
My mate’s main argument in beginning this debate, was to say that we black South Africans need to start building our own businesses, independent of the state if we want to see genuine transformation which will help us grow economically as well as fight income and asset (wealth) inequality.
My quick response to this, was to highlight the fact that the Afrikaner banks of the apartheid era, which are amongst the mainstream banking establishment at present, as well as most of the big Afrikaner conglomerates which now make up a large part of mainstream corporate South Africa, where indeed started with the assistance and support of the National Party government and so there is nothing wrong with black business and the state deliberately working together to transform our economy through building and investing in capacity by being preferential to each other.
Perhaps (as in this case), what we need to do is to relook and rework some of the laws which were put in place for good reasons, but hinder us in our quest to see a more transformed, inclusive economy I argued? After all, black business and black business people do not have the same access to social capital (and all its benefits) that white business and white people do and as such government must be systematic, unapologetic and very intentional about empowering, supporting, developing and promoting (pushing) black business across all sectors of our economy I further argued. Doing so, would contrary to popular, mainstream opinion, not lower standards or contribute to corruption, but would rather further our developmental objectives as a nation.