BRICS Youth Summit in Durban: SA’s Dlamini Zuma takes a swipe at big five banks and ‘world order’

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BRICS Youth Summit in Durban: SA’s Dlamini Zuma takes a swipe at big five banks and ‘world order’

1:15 CAT | 19 Jul 2023

Photo: Twitter / @DlaminiZuma

South Africa ‘forced to kneel’ before the country’s institutions, claims minister in the presidency

Nkosazana Dlamini Zuma has taken a swipe at SA’s five largest banks along with the geopolitical world order, while also calling for a new global financial system to be developed to enable non-Western nations to plot their own developmental path.

In an ideology-laden speech delivered at the BRICS Youth Summit in Durban on Tuesday, Dlamini Zuma, who is minister in the presidency for women, youth & people with disabilities, called on participants to reimagine an “alternative banking and financing architecture” for the Global South.

She told attendees at the summit they had a responsibility to “break” society’s acceptance of “rentier capitalism as an accepted orthodoxy”.

She made scathing references to colonial conquests, and said BRICS nations — Brazil, Russia, India, China and SA — have the potential to change the course of history and accelerate the downfall of an “unjust imperialist world order”.

“In SA we are forced to kneel before five banks,” Dlamini Zuma said in her keynote address. “This represents some of the most concentrated banking systems in the world.

“The greater concentration of banking to the big five has clearly undermined accountability, hindered development, stifled competition and passed on the cost burden to citizens.”

Traditionally SA’s big five banks mean FirstRand, Standard Bank, Absa, Nedbank and Investec, which dominate commercial lending in the country and control about 90.3% of the sector’s R5.4-trillion in assets.

However, in recent years Capitec is often included in the term “big five” when discussing the banking sector due to it having grown to such an extent that it now boasts the third-largest market capitalisation after FirstRand and Standard Bank.

Capitec still accounts for only 2.6% of the banking sector’s total deposit base largely due to it being historically more focused on unsecured lending to lower- income consumers.

Dlamini Zuma’s criticism of the banking sector comes while politicians such as former finance minister and Reserve Bank governor Tito Mboweni have called for the creation of a state bank.

In January, minister in the presidency Khumbudzo Ntshavheni claimed that Postbank was ready to take up the mantle as state-owned lender and had plans to roll out 100 new branches.

“We now have a structural problem of a banking industry that is not only greatly concentrated and monopolised, but also in many ways does not serve our interests,” Dlamini Zuma said. “We need an alternative public banking and finance system beyond the dominant one, and we need it urgently. Without control over finance and banking, only those projects that converge with the interest of private interests will be funded while the interests of the communities we serve take a back seat.”

While Dlamini Zuma said the New Development Bank (NDB), a multilateral financial institution established by Brics, is a step in the right direction she said there is an urgent need to “domesticate alternative banking as a matter of urgency”.

She also referred to Brics as a “geopolitical revolution” that will jolt the global community from its slumber.

“The history of Brics is fundamentally a history of resistance against colonial conquest and imperial abuse,” she said.

“It is in the DNA of every single Brics nation, historically and today, to be anti-imperialist at every turn.”

Dlamini Zuma then turned her attention to the Bretton Woods system and the neoliberal order, which she said are based on rules that have been “imposed” on the Global South and are only applied to the extent that they benefit Western corporations regardless of their effect on developing countries.

The Bretton Woods agreement was an international monetary system that pegged currencies against the dollar, which was in turn pegged to the price of gold, a system that effectively ended in 1971 when the US abandoned the gold standard.

“Each of the Bretton Woods institutions [World Trade Organisation, World Bank and IMF] has served the enduring and hegemonic principles of unipolarity, principally in pursuit of Western dominance and control of wealth-producing resources from the developing world,” Dlamini Zuma said.

“The West’s expressed belief in the developmental models they imposed on us has been a case of ‘do as I say and not as I do’,” she said.

In order for BRICS to reach its full potential and achieve its revolutionary purpose, we need to locate it within its proper context. As BRICS Youth Leaders, you have the responsibility to gain a firm grip and understand the history of BRICS nations themselves.#BRICSYouth2023 pic.twitter.com/9dhBUfSeVL

— Dr Nkosazana Dlamini Zuma (@DlaminiZuma) July 18, 2023