Prof Bonke Dumisa
Personally, as the former Chief Executive of the Durban Chamber of Commerce and Industry, I had to ask myself if I could do justice to this opinion piece on the legacy of the National African Federated Chamber of Commerce, NAFCOC.
Being a person who wears various hats, and as a person who has worn multiple hats in the past, I immediately concluded that as a pragmatic objective person, I am a suitable person to reflect on the significant role played by NAFCOC in its 60 years as a leading African voice of business in South Africa; and on its role in focusing on the upliftment of black business people.
NAFCOC was very effective in organising Black businesspeople into working together as a formidable force, instead of actively working against each other. What made it easier for NAFCOC to recruit Black businesses those days was that they were those days not allowed to join “White organised business” like the Durban Chamber of Commerce and Industries, and business federations like the South African Chamber of Business (SACOB).
The exclusion of Black businesses from the mainstream organized business formations forced many of them to join Bantustan business formations that made many politically conscientious radical Blacks view NAFCOC and other formations like INYANDA with jaundiced eyes.
It was in 1964 that a famous Soweto businessperson Mr Richard Maponya joined hands with the then little-known Dr Sam Motsuenyane in launching the National African Federated Chamber of Commerce, NAFCOC, which was to later grow bigger to comprise twenty industry-specific sectors of the economy.
Whilst there is no debate about the effectiveness of NAFCOC in fighting for the rights of Black businesses; there are serious disagreements about the actual size, in numbers, of NAFCOC members at its peak. NAFCOC’s documents claimed that it had a total membership of approximately 2.3 million. On the other hand, Wikipedia wrote “NAFCOC claims a membership of several hundred thousand and controls substantial investment funds”.
Under normal circumstances, the issue of real membership figures would be immaterial if they were very effective where they operated because this would give them the right to claim that they were the authentic voice of Black businesses.
It was partly along these lines that Dr Sam Motsuenyane and Mr Richard Maponya tried for many years to raise capital to start a “Black Bank” but repeatedly failed to achieve this noble goal. It was only on 31 July 1975 that the apartheid-era South African Reserve Bank approved the registration of the African Bank after these NAFCOC members had finally been able to raise this R1 million capital.
The very first branch of the African Bank was in Garankuwa, near Pretoria. It was not by coincidence that the first branch of the African Bank was in Garankuwa. You must remember that Garankuwa was strategically located by the apartheid regime to position it as an attraction to the Bantustan system of Bophuthatswana, whilst at the same time the greater part of Garankuwa “remained in South Africa”. It was also for the same reasons that the Medical University of Southern Africa, MEDUNSA, was also located there.
It was a great achievement that the management of the African Bank was able to make this bank an overnight success, and it quickly spread across the country when it opened new branches. As it continued to spread across the country, it began to reposition itself from a purely deposit-taking bank to also being a credit-granting bank.
The move of the African Bank into credit-granting made them very popular, and their loan-book quickly grew quicker than their deposit-taking wing. This marked the beginning of their major problems which ultimately led them into a position where they changed hands more than once.
In 1995, it was bought for R100 million by the Natal Building Society, NBS, together with the New African Investments Limited, NAIL.
In 1998, it was acquired by Thetha Investment Group who later renamed it the African Bank Investments Limited (ABIL).
Why did the African Bank need business rescue when it was an “understanding South African bank which was established by the Africans themselves, who understood that most Black people don’t have “collateral” when applying for bank loans? This should be a clear lesson for those who want to see the establishment of a “South African State Bank” which will make it easier for all and sundry to get loans without any rigorous risk assessment of each applicant whether they will be able to repay their loans or not.
The major reason why the African Bank was able to avoid being closed and liquidated, was because it was relatively easier to separate it into “the GOOD BANK” and the problematic parts which could be disposed of.
We therefore hope that the noble ideals of both the late Dr Sam Motsuenyane and Mr Richard Maponya of seeing a successful “Black Bank” will never again be dashed by the political posturing of people who think that money grows on trees, and start dishing out unsecured loans to people who are highly unlikely to repay the loans taken. Serious risk assessment and due diligence are at the centre of any successful business. There is no place for political populism in organizations that want to be successful for decades.
* Prof. Bonke Dumisa is an independent economic analyst.
** The views expressed do not necessarily reflect the views of IOL or Independent Media.