South Africa's ANC to Discuss Doing Business With Nedbank
Tag: South Africa, South Africa Business
Summary: South Africa’s ruling party will discuss whether it “makes sense” to bank with Nedbank Group Ltd. (NED) after the lender’s chairman said the “moral quotient” of the nation’s political leaders…
South Africa’s ruling party will discuss whether it “makes sense” to bank with Nedbank Group Ltd. (NED) after the lender’s chairman said the “moral quotient” of the nation’s political leadership was “degenerating.”
“Insulting the political leadership in annual reports is taking things too far,” African National Congress Secretary- General Gwede Mantashe said today in an editorial in the Johannesburg-based New Age newspaper.
“When business develops unpatriotic tendencies through their reckless pronouncements, their sentiments are used by potential investors to measure the wisdom of investing in their country.”
Nedbank Chairman Reuel Khoza, who was a presidential adviser to the previous government of Thabo Mbeki, said in the lender’s annual report last month that the administration of Jacob Zuma was “losing the checks and balances that are necessary to prevent a recurrence of the past.
Zuma, who ousted Mbeki in 2007, is preparing to fend off a challenge to his leadership of the ANC at a party conference in December.
“There is a huge crisis developing in the South African banking industry,” Blade Nzimande, South Africa’s minister of education, wrote in a separate editorial in New Age, citing the jump in unsecured lending. “It is likely to lead to a serious bubble, not dissimilar to that of the rest of the global banking and financial sector, unless drastic action is taken.”
Linking the “alleged problems” of the banking industry to the issues raised by Khoza leads to “uncertainty and speculation,” said Cas Coovadia, managing director of the South African Banking Association.
“We should, as a country, be ensuring we don’t jeopardize” bank stability, said Coovadia, adding that more data must be gathered to understand the increase in unsecured lending. “It is inappropriate to make public comments like the banking industry is ‘facing the eye of a storm’ and that ‘there is a huge crisis’.”
Government contracts changing hands have “never caused any bank to fail” and should not do so in the future, Rene van Wyk, South Africa’s Pretoria-based banking regulator, said in an e- mailed response to questions. “All the major rating agencies recently re-affirmed the financial strength of the major South African banks on a stand-alone basis.”
Khoza’s comments came as the ANC prepares to debate changes to South Africa’s constitution in June, City Press reported last month, citing party documents. The ANC last year pushed a law that proposes jail sentences of as long as 25 years for anyone obtaining classified information, even if it’s in the public interest.
“We observe the emergence of a strange breed of leaders who are determined to undermine the rule of law and override the constitution,” Khoza said in the report. “This is not the accountable democracy for which generations suffered and fought.”