The solution to apartheid’s most damning legacy – economic inequality – is the extension of financial services to all South Africans. This is the only way that young, black entrepreneurs will be able to build business, create jobs and bridge the racial wealth divide.
Today, sadly, of South Africa’s 43 million black people, at least 10 million are without banking services and millions more without full access to financial services, according to the World Bank. This is because the financial sector is dominated by the same banking cartel as at the end of apartheid, made up of Absa, Nedbank, FNB and Standard Bank.
In fact, there is no black-owned bank in South Africa. And if you are one of the lucky few black entrepreneurs to secure a business loan, you will suffer punitively high interest rates.
A call to arms
During his 10th State of the Nation Address, President Jacob Zuma said that the banks have treated poor black people unfairly and have played a role in maintaining economic inequality along racial lines. Key extracts from President Zuma’s SONA include:
“The time has come: we should be able to deal with the economy at a fair level”
“We need to change the commanding heights of the economy, and increase the participation of black people as owners and managers. Progress made on the achievement of this goal will greatly enhance the national reconciliation programme”
“One of the key tasks in this regard, should be a heightened fight against racism. All institutions and businesses must promote inclusion and non-racialism. Nobody must be excluded on the basis of colour or race, through subtle and unconstitutional means.”
Many will argue against banking reform, especially the banks and big business. Monopoly capital can, and will resist. But the numbers do not lie. The status quo is an unmitigated failure.
The President is therefore right – the state must do more.