Meshack Mabogoane reports on the political and racial issues that have arisen as the African Bank closes its doors
The closure of the African Bank (AB), pioneering black financial institution, has sparked off racial emotions, political heat and personal anguish.
The AB has been more than just a business venture; its symbolic value — reflected in its advertisement showing black bodies pulling together and telling about “our bank” — has always been its ace card.
However, its business prospects, even with its racial appeal, have been rather remote.
It began with massive handicaps: political hurdles; a dearth of black banking management expertise; the scepticism of the black community itself; and paucity of investment funds from the same — it took 10 years to raise R1-million.
The South African banking sector, dominated by Leviathans, though some took equity, is now characterised by competition on service rather than price cutting.
The AB had to pull itself up by its bootstraps and rise in faith, in keeping with the spirit of the motto of the National African Federated Chamber of Commerce (Nafcoc), its parent. This plan was laid out in 1964 and it was only in 1975 that business began.
Although that period was the worst of times — at the height of the Bantustan policy which prohibited any significant black business enterprise development outside of the homelands; it was also the best of times –the era of black consciousness which stressed, in Steve Biko’s words, that blacks should be on their own.
In business the AB hoped to do just that. Nafcoc, of course, did not openly subscribe to the ideology but its spirit was significant.
>From the onset the bank’s operational grounds were limited to the periphery. The first branch in Garankuwa was chosen because it was in a Bantustan closest to the PWV area.
For every inch of concession – including the establishment of branches in other areas – Nafcoc had to negotiate through and around heavy restrictions.
The role of Sam Motsuenyane in all of this is legion. He shouldered the burden of piloting the bank through all the stormy weather.
The emotional struggles that Motsuenyane waged should be reckoned as the real capital he brought to the AB, in particular, and to the liberation of black business, in general.
The AB is both a monument to his struggles and hopes for a black financial institution.
This legacy provides much of the emotional substance that has come to the fore. With the formation of this new order, black business has come to expect a fillip
After all, both economic empowerment and affirmative action are the “in things”, even with government.
At the recent Nafcoc annual conference four cabinet ministers were present and promised meaningful changes for black business.
The problems of the AB are viewed as the classic test case.
Although comparison with the treatment given to the Trust Bank by the Reserve Bank, when the former got into trouble, is specious — the Trust Bank had liquidity problems while the African Bank is faced with insolvency — there is a feeling that the black government has a duty to step in to salvage a national institution much as the British and American governments helped to rescue Rolls Royce and Chrysler, grounded by insolvency, on “national” ground.
After all, the AB has been a genuine case of collective black empowerment conducted by a true national business organisation.
Political and racial feelings are running high. White Chief Executive Jack Theron was seconded by the Reserve Bank, while Chief Executive Moses Maubane left in the wake of the bank being used by white officials for a financial rand fraud.
Theron stands accused of not paying interest on a loan of more than R3-million and his issuing of doubtful loans to white clients, in spite of refusal by black managers, has led to charges of “sabotage” of a black institution.
It is paradoxical that the collapse of an institution that survived the worst period in black business history should happen when it was expanding — for the first time cheques were to be issued to customers, a lack of which had discouraged many potential clients — and at time when black economic empowerment is at its zenith.