Professor Thandika Mkandawire of the London School of Economics says that South Africa’s financial sector is “too powerful…” Photo: Supplied

PRETORIA – I feel vindicated by the views of a top academic on the article I penned a few days ago on the ‘state bank’. I suggested that the proposal by Floyd Shivambu of the Economic Freedom Fighters (EFF) to the SCOF for the creation of a state-owned commercial bank was not going to see the light of day because big banks monopolise the financial sector.

Now Professor Thandika Mkandawire of the London School of Economics says that South Africa’s financial sector is “too powerful…”

This came out in a lengthy interview with the SABC where he covered a number of issues from Africa-China relations to the recession in South Africa. He provided a refreshing and different approach to the South African problem, something that we rarely hear these. Sometimes that is the reason I appreciate senior citizens, they are not afraid to speak their minds.

Mkandawire suggests that South Africa will never grow beyond the rates it is growing due to high levels of inequality. This inequality manifests in the land issue, which he argues that it is not just a rural problem but definitely an urban one. He observes that while many people live in squalor, a tiny minority has lush big pieces of land. He therefore does not oppose the idea of land being revisited to deal with this rather unfair situation.

White capital does not accept skills of black people because it still more than convinced that only whites possess requisite skills and knowledge. When asked if South Africa could find another model to get the economy out of the present doldrums, he simply responded that economics alone isn’t a panacea for all. He opined that the issues that are normally termed “economic” are not divorced to broad societal issues.

Mkandawire does not hold the apartheid government in any regard, this could seriously disturb those who suffer from nostalgia. He dismissed the apartheid model of development to have been based on forced, cheap labour and surpluses from mining. As a result, it appears South Africa has not found a good development model after the previous government opted for the liberalisation model instead of stabilisation of the economy. Mkandawire does not seem to think much about neoliberal economics, it seems.


As an economist, Mkandawire is of the view that that role of economics is overvalued in finding solutions for society. This more or less corresponds with my views that the dominant narratives advanced by economists are largely tired and fail to explain problems facing many countries today. He also added that economics taught at universities is more geared towards the developed world and not suitable for what Africa needs today.

Hence, the failure to explain the reported “technical recession” which economists either claim came as a result of the “Zuma mess in the past 10 years” or the bad performance by the agricultural sector due to drought.

Mkandawire without being direct, he nonetheless gave quite enlightening perspectives on the state of the South African economy. This is quite lacking in analyses that we receive every night on television from economists, who shy away from upsetting their employers (mainly large banks, as one person pointed out). Analysts are scared to pinpoint the problem: white capital.

The recession is a culmination of efforts to destabilise the country and also to undermine black leadership. By only focusing on frivolous issues like poor performance of agriculture it means that we refuse to deal with the big elephant in the room, white capital. It makes sense to single out white capital in the economic troubles the country faces.

Land reform must be blocked at all cost. Should it go ahead, powerful white capital stand to lose more than anyone else. It is not recession but sabotage.

Therefore, the answer on how to pull South Africa out of the entrenched quagmire urgently requires new thinking, such as “nationalising the financial sector in totality” as one scholar suggested. The explanations or narratives provided by mainstream economics are certainly outdated and a half-hearted attempt to divert attention from fundamental issues embedded in the structure of the South African society.

There is no way the economy will grow when the society is in such a great mess and also existing at the mercy of powerful white capital. As American author Naomi Klein, South Africa is “a democracy born in chains”.

We are battling for the soul of South Africa.

Siyabonga Radebe is an independent commentator on socio-economic, politics and global matters based in Pretoria.

The views expressed here are not necessarily those of Independent Media.

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