By Feroza Petersen
NINE of South Africa’s banks, Standard Bank, Nedbank, Absa, First Rand Bank, Access, Mercantile, SASFIN, Bidvest and Investec, have taken unprecedented steps to exercise their authority to attempt to close the Sekunjalo Group’s bank accounts, and those of the group’s chairman Dr Iqbal Survé, which could lead to significant disruptions in the country’s already very high unemployment rate.
South Africa’s unemployment crisis has reached alarming proportions, with millions of people struggling to secure jobs and make ends meet. Amid this bleak landscape, recent actions by major banks in the country have intensified the struggle for economic stability.
The Sekunjalo Group, a significant player in South Africa’s business landscape, is more than just a corporate entity. It covers the livelihoods of more than 8 000 employees and about 40 000 dependents, who now face an uncertain future due to the potential closure of their employer’s bank accounts.
These are not mere statistics, they are real people whose lives are being upended by the banks' decision, plunging them into a state of economic vulnerability.
According to Statistics SA, the country’s unemployment rate stood at 32.6% in the second quarter of 2023, slightly lower than market expectations and the previous period’s 32.9%.
The expanded definition of unemployment, which includes those discouraged from seeking work, was 42.1% in the second quarter, down from a prior 42.4%. The youth unemployment rate, measuring jobseekers between 15 and 24 years old, dropped to 60.7%. The figures remain extremely high, despite a slight drop in the second quarter.
The fight to protect the livelihoods of all Sekunjalo employees is a fight for democracy itself.
The dire unemployment situation has led to desperation among young South Africans, who had once hoped for a brighter future in the post-apartheid era. Almost 30-years into democracy, unemployment has cast a shadow on their dreams, fuelling anger and disillusionment.
The UN has warned that South Africa’s unemployment crisis poses a serious threat to the country’s stability, as evidenced by the 2021 riots and looting in KwaZulu-Natal that left more than 350 people deceased.
The banks’ actions, in their eagerness to close the Sekunjalo Group’s bank accounts, could contribute to the nation’s existing challenges. South Africa’s ongoing struggle with poverty, inequality, crime, and corruption is further compounded by its high unemployment rate.
In a recent opinion piece in Business Report titled “Reserve Bank Snuffs Growth, Jobs and Empowerment” written by Duma Gqubule, an economist and founder of Kio Advisory Services which specialises in BEE strategy and implementation.
Gqubule advised the South African government that its gross domestic product (GDP) needs to grow by 6% a year to start creating enough jobs just for the 700 000 people who enter the workforce every year.
Isobel Frye, executive director of the Social Policy Initiative in South Africa, which researches poverty and unemployment, said it equates to 24 million adults out of a population of 60 million who are either unemployed or not involved in any economic activity and barely surviving.
South Africa’s banks have a crucial role to play in the nation's economic recovery. Rather than exacerbating the unemployment crisis through arbitrary account closures, these financial institutions should actively contribute to job creation initiatives.
By investing in sustainable projects and supporting businesses, banks can be catalysts for positive change, offering hope to millions of South Africans yearning for employment opportunities and economic stability.
The plight of the Sekunjalo Group and its employees serves as a stark reminder of the interconnectedness between corporate decisions and societal well-being. As South Africa grapples with a soaring unemployment rate, it is imperative for all stakeholders, including banks, to act responsibly.
By fostering an environment of economic stability, job creation, and opportunity, these institutions can be instrumental in steering the nation toward a brighter, more prosperous future.
Now, more than ever, it is essential to prioritize the well-being of ordinary citizens, ensuring that they are not collateral damage in corporate battles but active participants in a thriving, inclusive economy.
* Feroza Petersen is a freelance writer