Ramaphosa leaves South Africa’s big banks high and dry: report
The Banking Association of South Africa reportedly met with president Cyril Ramaphosa following damaging accusations of treason levelled against private businesses by minister in the presidency Khumbudzo Ntshavheni late last year – but nothing has come of it.
Speaking at a post-Cabinet briefing in November 2023, Ntshavheni commented on developments in the Competition Commission’s rand manipulation case, where 28 finance groups, including the big local banks, stood accused of fixing rand/dollar trades between 2007 and 2013.
The case has since been largely thrown out by the Competition Appeals Court (CAC).
Nevertheless, UK-based Standard Chartered Bank was one of the accused banks to admit to the manipulation and paid a penalty of over R42 million.
Ntshavheni used this admission and penalty as a basis to attack the private sector in South Africa, specifically the banks, accusing them of having no interest in building South Africa, even going as far as alleging treason.
“We have maintained over the period that the performance of the rand and sometimes the performance of the economy has been manipulated by the private sector, which has no interest in the development of this country‚ which continues to engineer and do machinations to make sure the government collapses,” she said.
Speaking to the Sunday Times, Managing Director of BASA, Bongi Kunene, said that the minister’s comments were incredibly damaging to the banking sector, which is built on trust, and came at a sensitive time – just weeks after the banks agreed to help fund the government’s development projects.
Kunene said the damage was done on many layers – both locally and internationally – and prompted BASA – which has all the major banks on its board – to approach president Ramaphosa.
She said the association left a meeting with the president, satisfied that he understood that the allegations could not be allowed to stand.
However, nothing has been done about it, and no public retraction or apology over the allegations has been made.
“It would be something that the banks would love to hear, but that’s in the arena of politics. I doubt we are going to get either a retraction or an apology. The accusations do still stand; they’re still out there,” she said.
“But the view the banks were able to articulate for themselves is also out there. It’s in the public record how we responded. How government walks away from the minister’s accusations, the ball is in their court.”
Following her initial comments, Ntshavheni subsequently double-down on her position, which essentially rehashed the Competition Commission’s now-collapsed case as a justification for her “views”.
She also stated that she is “first to acknowledge the active contribution of the private sector” in dealing with South Africa’s problems. However, it is evident that this acknowledgement does not extend to retracting harmful and baseless allegations of treason.
In the wake of the rand-fixing scandal, many economists and financial experts came out to explain that the case was extremely limited and that South Africa’s economy as a whole was not impacted.
This is a position that was backed by the National Treasury itself, which said only a few very specific trades were involved.
More specifically, the Treasury said that the continued deterioration of the rand and South Africa’s economy over the last decade could not be attributed to the case.
The case itself has been largely dismantled, with only four banks – all international – still having a case to answer to. The Competition Commission is still considering its path forward.
Read: Rand manipulation: Competition Commission responds to case collapse
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