South African banks – which are in the ANC’s bad books for bluntly refusing to increase their direct black ownership to 15 percent – have cautioned the ANC to be aware of the implications of its policy decisions at the upcoming Mangaung conference.
Cas Coovadia, the Banking Association of South Africa MD, told Business Day the policy decisions to be taken at the party’s elective conference next week could have a negative effect on banks.
South African banks have been in marathon and fruitless talks with the country’s labour movement in the past few years over increasing black ownership in banks from 10 to 15 percent.
Currently, blacks indirectly own 15 percent of South African banks following the country’s black economic empowerment policies which were introduced after the fall of apartheid.
But banks have flatly refused to increase their black direct ownership to 15 percent, saying this is the majority shareholding.
Majority shareholding, often referred to as a shareholder of reference, requires people or companies with deep pockets and the ability to help banks when they happen to face financial problems.
These talks went on for more than two years up until they broke down with no agreement having been reached a little more than two years ago.
This left the ANC, particularly its youth wing, livid and they have called for the nationalisation of all banking institutions.
A Johannesburg-based analyst said Coovadia’s call could be an attempt to pre-empt any policy that could be aimed at punishing them for refusing to increase direct black ownership of banks to 15 percent.
“The bottom line is, if (ANC delegates) take incorrect decisions on mining, land and agriculture, it has an impact on us,” said Coovadia.
But the ANC economic policy head Enoch Godongwana said he agreed with Coovadia that policy discussion was the key issue.
“Like banks, we love this country and we will make decisions that help us improve our socio-economic issues. “What we refuse to accept is for people to prescribe what decisions we should make,” Godongwana said.