SA ‘must act to regain trust of investors’

State capture has broken trust between social partners and harmed SA’s ability to attract investment, says the head of the country’s third-largest bank by market capitalisation.

Speaking at a Banking Association of SA (Basa) summit on Monday, Nedbank CEO Mike Brown said state capture and other governance failings “have broken the trust between social partners in SA and undermined our confidence in each other”.

“Now we must find a way to work together, because the challenges before us are too great for business, government, or labour to deal with on their own,” he said in his capacity as chairman of Basa.

The Zondo commission of inquiry into state capture is investigating how certain government departments and stateowned enterprises were corrupted and used for personal benefit. Former president Jacob Zuma, his son Duduzane and the Gupta family are at the centre of the state-capture allegations.

Brown is one of the banking executives who testified at the commission about how some ANC and various government officials tried to persuade them

not to close bank accounts related to the Guptas, even though they had detected signs of suspicious transactions.

What Brown termed the “crisis of confidence” in governance in SA had undermined the investment case for the country and many of its companies.

“The correlation between investment and sound governance is well known; you cannot get one without the other. In short, we cannot sustainably run successful businesses in an unsuccessful country, so we all need to do our part.”

In April, President Cyril Ramaphosa launched a drive to attract an ambitious $100bn over the next five years. In 2017, foreign direct investment totalled just $1.3bn due to an underperforming commodity sector and political uncertainty, the UN Conference on Trade and Development said in its 2018 world investment report.

Brown also highlighted the declining standards of governance in the private sector, pointing to the failures at Steinhoff and VBS Bank.

“For banks, these governance failures in the public and private sector are salutary reminders that we cannot take the trust of the public and our customers for granted. Ongoing vigilance is required to ensure that trust that has been established over time is not wasted by poor judgment and unethical behaviour.”

He called on all stakeholders to rebuild trust and confidence, beginning with everyone delivering on their promises “big and small”.

This must be accompanied by robust conversations, backed by the ability to hold one another accountable to achieve the common good, said Brown.