Finance minister Tito Mboweni used the image of a gluttonous hippopotamus to describe South Africa’s debt position. Unfortunately, it is becoming increasingly apparent that pensions and savings are to be used to feed it.
To the extent that there may be a commercial case for investing in government projects and state-owned entities, financial institutions would (and do) make them. To the extent that they are properly managed, executed and make an adequate (even if unspectacular) contribution to society, there is an ethical case to do so.
It’s hard to make such arguments in South Africa. The misuse and outright corruption that has drained the country’s resources hardly make such investments attractive.
So, an underexplored question is how the savings and investment industry will respond. Investors – often ordinary people trying to provide for their old age – have entrusted their money to these institutions in good faith.
Should the government attempt to raid these funds to feed its hungry hippopotamus, will they defend their client’s interests, or compromise them? Will they appease or resist?
This is a profoundly important matter. Prescribed assets are a doubtful idea in their own right, but under our current circumstances, they would represent a very real threat to clients’ interests.
Thinking on business ethics and corporate governance now recognizes that a prime duty is owed by companies to the society within which they operate – something that the past decade in South Africa should have highlighted. Being a good corporate citizen means at times making the uncomfortable decision to stand up to the government.
Will corporate SA do so? We need to hear from them.
Hermann Pretorius
Institute of Race Relations
