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Johannesburg - The temperature is reaching boiling point when it comes to economic transformation, the chairperson of the standing committee on finance, Yunus Carrim, said this week in the wake of the completion of the parliamentary hearings into transformation of the financial sector.
The hearings nearly blew up into fisticuffs, but ended in an orderly fashion with a pledge to urgently ensure that practical steps are taken to change the status quo in the industry.
Carrim emerged unshaken after an ugly altercation with Black First Land First founder Andile Mngxitama threatened to derail the third and final day of the hearings.
Conveying the delicate balancing act required, Carrim told City Press:
“The perilous economic and political climate both reduces the prospects of a major transformation of the financial sector and, at the same time, makes it ever more necessary.”
The joint committee is also grappling with deeply polarised ideological perspectives about what needs to be done.
“We’re not calling for an overnight overhaul, but, unless the sector transforms effectively and sustainably reasonably soon, the country is heading for a social explosion,” he said.
More than 70 submissions were made – from the big banks and the JSE, to smaller industry players and advocacy groups – at the joint hearings of Carrim’s committee, and the trade and industry committee.
Carrim would not pre-empt the findings, which will be considered by the committee before a report is drawn up, but he highlighted the following glaring realities:
. The Financial Sector Charter needed to be updated;
. The level of concentration of the market needed to be addressed;
. New black entrants were needed;
. The licensing of Postbank needed to be fast-tracked;
. The insurance industry and asset management, in particular, were untransformed and needed to be deracialised; and
. Amendments to the laws relating to bank repossessions were needed to prevent abuse of house and car owners.
He pledged that the process would be more than a talk shop.
“We are obliged to ensure that there are practical outcomes. Our report will set out clear recommendations and timelines, and we will constantly monitor progress,” he said.
In his closing remarks at the hearings, Carrim said that the process, which he conceded had had its “ups and downs”, was long overdue.
He cautioned, however, that despite high levels of frustration around the slow pace of transformation, the country could not afford a “dramatic overnight, anarchist, unstructured overhaul of the financial sector”.
Economic transformation was an emotive issue, and some sweeping statements were made during the hearings.
“It is like a red rag to a bull, and it doesn’t matter if people are accurate in what they describe. It is what they feel,” Carrim said.
He even acknowledged that there were some solid recommendations from Mngxitama – a former MP who was expelled from the Economic Freedom Fighters – that needed to be taken into consideration.
But he was dismissive of the “sloganeering” in Mngxitama’s emotionally charged testimony, which City Press noted was peppered with at least 20 references to white monopoly capital.
Carrim lost his cool when Mngxitama said struggle stalwart Joan Fubbs was a fascist.
Proceedings deteriorated into a scuffle and a shouting match, during which Mngxitama threatened to beat up the usually measured Carrim.
Police hovered during the 15-minute standoff. Proceedings continued in an orderly manner after Mngxitama and his entourage, which included a Gupta-owned ANN7 camera crew, exited the room.
In her closing remarks, Fubbs brushed aside the slurs and bluster. Instead, she pressed home the urgent need to act.
“We hope that the recommendations we finally come up with will actually lead to transformation of the financial sector. We cannot wait any longer. It will be 24 years [since democracy] soon, and then 25.
"And people will begin to doubt the credibility of Parliament and ask whether it is effective.”
Treasury and trade and industry representatives agreed that more needed to be done to transform the sector.
They will report back to the committee with their considered responses in two weeks.
MPs have until Wednesday to submit individual recommendations, after which a draft parliamentary report will be drawn up.
