6 October 2004
The Congress of South African Trade Unions and the South African Communist Party are concerned at reports that financial institutions have unilaterally decided to commit R122,5 billion to funding largely narrow-based black economic empowerment.
Firstly, this amount - and the targets which are set out in the report - have not yet been approved by the Financial Charter Council (FCC), which is scheduled to meet next week. This body - which represents government, labour and civil society, as well as the finance industry - is supposed to exercise democratic control of the sector, but it is effectively being sidelined.
Secondly the biggest single item is the R50 billion for funding black economic empowerment (BEE), which will once again go to a narrow group of individuals who have already become rich through deals of this type. There is no indication of a move towards a more broad-based form of BEE, as advocated recently by Kgalema Motlanthe and Zwelinzima Vavi, of the ANC and COSATU.
The remaining amount (R72,5 billion) is targeted at social projects, like low-cost housing, bridges and agriculture, but the amounts do not come near to what is needed in the sectors identified. This is a very small proportion of the financial sector's total assets of R1 trillion, and it is not clear how much of this total would have been invested in the sectors identified anyway.
COSATU and the SACP reaffirm their insistence on the democratisation of the finance sector and demands that this funding process be halted until there has been a thorough discussion involving all stakeholders at the FCC.