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Cape Town – Public hearings on transformation in the financial sector on Tuesday in Parliament were characterised by frank discussions on the progress the industry has made in implementing black economic empowerment targets, but also calls for establishing state-owned banks that will challenge the current concentrated structure of South Africa’s biggest financial institutions.
At a joint sitting hosted by the standing committee on finance and the portfolio committee on trade and industry, close to 20 stakeholders ranging from the big banks, Cosatu, the SACP and smaller players in the industry made submissions on the matter.
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While South Africa’s three big banks – Barclays Africa Group, FirstRand and Standard Bank explained how far they’ve come in meeting the targets set out in the Financial Services Charter, trade union Cosatu and the SACP slammed the “interrelationship” between banks, the insurance sector and asset management industry that keeps out smaller players and new entrants.
Cosatu and the SACP further lamented the questionable access to affordable, quality financial services – especially in poor rural areas – and pleaded with government to create a public-owned banking sector to overcome these obstacles.
Microfinance South Africa, the body that represents smaller micro-lenders in South Africa, bemoaned the onerous regulations in the financial services sector, which is a major challenge to small players in the lending sector.
An actuarial scientist, Melosi Baloyi from the Actuaries Lekgotla, complained in his submission about the salary discrepancies and top management opportunities between black and white actuaries in South Africa.
He said black actuaries are very frustrated with the slow pace of deracialisation and transformation in the financial services sector and challenged the industry to explain why white male actuaries get higher salaries as black and female actuaries.
He suggested that black actuaries should be enrolled in mentorship programmes so as to ensure they reach their full potential.
The Black Business Council’s Danisa Baloyi and George Sebulela pleaded with the financial services sector to support small black business. The body also offered some suggestions as to how the sector can be transformed more swiftly, such as raising the ownership targets for companies who apply for financial services licences.
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The public hearings, which were conducted cordially, threatened to derail towards the end when the DA’s shadow minister of finance David Maynier, asked the BBC’s Baloyi whether her PhD was forged.
He was referring to a Moneyweb report in 2007 in which it was alleged that the Columbia University from which she had graduated had no record of her qualification.
A visibly upset Baloyi said she would not be “dragged into the gutter” by entertaining questions from Maynier, who she called a “product of apartheid”.
Responding to a question whether the BBC was vying for the Gupta family, Sebulela said in his response that it’s a “fallacy” to think the BBC is being controlled by the Guptas.
“The BBC is led by sophisticated, smart people. We represent 51 organisations, which make collective decisions that advance black people’s participation in the mainstream economy.
“[This notion about the BBC being controlled by the Guptas] must stop. We are not in alliance with the Guptas,” Sebulela said.
The public hearings were concluded by a submission from Firstsource Money’s Redge Nkosi, who said state banks must be created, such as in China, Germany and “elsewhere”.
“That’s why Germany and China are such powerful economies today.”
Joan Fubbs, chairperson of the portfolio committee on trade and industry, wrapped up the day’s proceedings, saying it has been 23 years since democracy and evidently “little has changed” in the financial services sector.
“We’ve heard admissions today that the top structure in this sector remains the same (white).”
The DA’s Maynier opined that he was pleased that the day’s public hearings did not “descend into a banker bashing frenzy and a radical economic transformation show trial”.
“But we spent too little time and energy on financial inclusion. The real challenge is extending financial services to the poor. And that is the problem that we have to tackle."
The three following interviews took place in the foyer outside the Old Assembly, where the hearings took place...
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