South Africa’s biggest banks paid over R900 billion in taxes over the last fifteen years – and then got accused by the ruling party of trying to collapse the state.
Many of the country’s top banks are implicated in manipulating the value of the rand against the US dollar to increase profits between 2007 and 2013.
The illegal tactics involved fixing bids, offers, bid-offer spreads, spot exchange rates, and the exchange rate at the FIX.
The currency manipulation was often associated with significant transactions, such as mergers, acquisitions, large export deals, or capital transactions.
These isolated events had a minimal impact on the daily value of the rand and did not affect the longer-term currency value or economy.
The National Treasury confirmed that the alleged manipulation of the rand did not affect the currency’s value and is not the reason behind its decline over the past decade.
However, this did not stop ANC politicians from trying to capitalise on the investigation with unfounded accusations against the banks.
Minister in the Presidency Khumbudzo Ntshavheni led the charge, saying the private sector has manipulated the performance of the rand and the economy.
She added that the private sector had no interest in the development of this country. “They continue to engineer and do machinations to make sure that the government collapses,” she said.
“That’s why they also self-feed in the narrative that there’s a collapsing state and a collapsing economy because that’s what they wish for, and their actions do that.”
Renowned economist Dawie Roodt said Ntshavheni’s comments made him extremely angry because the mismanagement by the ANC government causes South Africa’s economic challenges.
“The poor state of the economy is because of the incompetence and corruption of the ANC government,” he said.
He added that the banks and the private sector are the only groups keeping the economy from collapsing.
“We have a government which is actively undermining the South African economy. If it was not for the private sector, there would not have been anything left,” Roodt said.
Apart from the alleged rand manipulation having no impact on the long-term currency value and the economy, Ntshavheni seems to forget that the banks are big funders of the state.
Daily Investor calculated tax contribution of Standard Bank, Nedbank, Absa, and FirstRand between 2007 and 2023.
For this calculation, Daily Investor considered corporate tax, personal income tax of employees, value-added tax (VAT), and other taxes.
It showed that the four large banks generated over R900 billion in tax revenue for the government to spend on education, healthcare, social grants, and infrastructure development.
The banks, therefore, provided tremendous financial support to the government to support its initiatives and build the country.
It is a far cry from Ntshavheni’s claim that the private sectors, and banks in specific, “engineer and do machinations to make sure that the government collapses”.