An attempt by Economic Freedom Fighters (EFF) leader Julius Malema to convince Parliamentarians to nationalize banks failed woefully after the ANC and DA vehemently opposed the proposal.
Tabling his proposal in Parliament on Tuesday, Malema pushed for the introduction of a “Banks Ownership Act”, which would see the State nationalise commercial banks in South Africa without compensation.
It’s common knowledge that financial services is the biggest sector in the South African economy, as it employs 250 000 people and contributes 17.2% of the country’s GDP.
The EFF, however, lamented that no bank in South Africa has meaningful ownership by black people, regardless of the fact that banks control and run the lives of so many people in the country.
Malema said he would want the state to have 51% of every bank, while the remaining 49% should be divided among other investors, with no single investor owning more than 10%.
If implemented, he asserted this would ensure that banks are democratised to serve the interests of people and prevent it from being captured.
“Our view is that the State ownership should be prioritised but should not completely close out other forms of ownership. This model of combined ownership, anchored by the State, makes sure banks are democratised…”
Malema’s proposal, however, didn’t go down well with most opposition parties, including the Democratic Alliance (DA), which the EFF had earlier thought would support the idea.
In response, a pessimistic member of the ANC, Adrian Williams, said he believes banks would not just surrender their money, adding that the current state of state-owned enterprises, such as SAA and Eskom, are examples why nationalizing banks would be a bad idea.
“They are going to force this government to pay back the money. South Africa does not exist in a vacuum. When it comes to international finance we are just a cog in the capitalist wheel,” Williams said.
Joan Fubbs, another ANC MP said the EFF’s policy was misguided and that the nationalisation of banks would negatively impact the poor.
Similarly, DA MP David Maynier described Malema’s proposal as “not just a bad idea, but a mad idea that will crush the hopes of the 9.4 million jobless people.”
In his conclusion, Malema accused the ANC of now sharing the same ideology with the DA and being “in the same Whatsapp group”.
Meanwhile, the Banking Association of South Africa (BASA) has described the debate for the nationalization of banks in the National Assembly as “alarming”.
In a statement, BASA said the nationalisation of banks will have a direct impact on stability, and will seriously undermine what fragile levels of confidence remain in South Africa’s economy and society.
“We cannot allow ourselves to be in a position where we are further undermining the competitive positions that remain because of political expedience,” the Association added.
Weighing in, the African National Congress Women’s League (ANCWL) said they viewed the motion on nationalisation of banks without compensation as nothing but populist and political grandstanding.
The Inkatha Freedom Party’s youth brigade chairperson Mkhuleko Hlengwa also rejected the red berets motion, saying that the ideal will take the country back and that South Africa was not ready to go back there.