The South African Government vs. Banks and Airlines: A Dance of Empty Promises?

South Africa’s economic landscape has long been a battleground between the government and corporate giants. Recently, the Portfolio Committee on Trade, Industry and Competition announced that South Africa’s five largest commercial banks — Standard Bank, FNB, Absa, Nedbank, and Investec — will be summoned to Parliament early next year. The reason? To explain their actions, particularly regarding their business practices and impact on the local economy.

However, many South Africans are skeptical of these efforts, as the country’s history with corporate accountability is filled with half-hearted promises and minimal consequences. From the banking sector to the airline industry, government interventions often sound good on paper, but the real question is whether these efforts will actually lead to meaningful change.

The Banking Conundrum: Easy Credit for Consumption, Hard Credit for Entrepreneurship

The issue at hand, according to Mzwandile Masina, the committee’s chairperson, is the contrast between the easy availability of credit for consumption and the stark difficulty of securing funding for entrepreneurship. Masina pointed out that while it’s almost effortless to get credit for purchasing goods and services, securing funding to start or grow a business in South Africa remains a daunting task.

Why is it so easy to borrow for consumption, but so difficult for entrepreneurs? The answer likely lies in the banks’ risk-averse nature. Lending for consumer spending offers banks predictable returns with minimal risk. On the other hand, funding for business ventures, particularly small to medium-sized enterprises (SMEs), comes with higher risks, lower guarantees, and more challenging long-term prospects.

Masina’s call for accountability is focused on making these banks justify their actions and practices. But given the power that these financial institutions wield, it is highly likely that their influence will diminish any actual impact Parliament can have. After all, in a system where big corporations hold the keys to economic stability, even the loudest parliamentary outcries can fall silent.

Bank Charges: A Continued Source of Frustration

Another key issue raised by Masina is the exorbitant bank charges levied on individuals and government institutions. These charges continue to hurt South Africans who are already struggling under the weight of high inflation and economic instability. Banks, with their monopoly-like hold on the financial sector, have little incentive to reduce these costs, as they continue to rake in profits while everyday South Africans bear the burden.

Despite the government’s ongoing promises to intervene, it’s hard to imagine any real change coming from these hearings. With corruption running rampant within both the public and private sectors, there’s little hope that these banks will face any significant consequences.

The Airline Industry: Sky-High Prices for the Average South African

The government has also shifted its focus towards the airline industry, with calls for an investigation into what’s perceived as price gouging by low-cost carriers like FlySafair, Lift, Airlink, and CemAir. South Africans are already dealing with the highest cost of living in decades, and air travel — even within the country — has become prohibitively expensive for many.

Masina described the ticket prices of these airlines as “exorbitant,” and urged the Competition Commission to launch a market inquiry into the practices of these companies. But, just like the banking sector, the airline industry operates in a similar dynamic. These airlines are riding a wave of low demand, as few South Africans are willing to travel frequently given the high costs of air tickets. For the few that do, the service is often subpar, with aging fleets and inconsistent service.

In this instance, the government’s reaction seems aimed at appeasing voters, promising an investigation into the airline’s pricing. However, as with many such investigations in South Africa’s history, it is likely that the airlines will be able to either settle with the authorities behind closed doors or delay action long enough that the public’s anger subsides.

The Elephant in the Room: Corruption and Corporate Power

While the government continues to present these “kinder” moves as part of their political strategy to win the hearts of voters, many South Africans are not buying it. The reality is that nothing truly changes. We’ve seen this play out time and time again in the past, with corporations manipulating the system to suit their needs while politicians struggle to enact meaningful change. Banks continue to have free rein over South Africa’s currency and economy, while airlines charge what they please for substandard service.

The sad truth is that the deep-rooted corruption in the country — across both government and the private sector — ensures that real, lasting change remains elusive. Banks know that there are no viable alternatives for South African consumers, so they manipulate the system without fear of consequences. Airlines know that they have a captive market, with few options for affordable travel, especially between provinces.

So, while Parliament will likely hold these hearings and make all the right noises, it’s hard to believe that this time, anything substantial will come of it. South Africans have heard these promises before, and nothing has changed. The banks will continue to operate as they always have, and the airlines will find new ways to justify their inflated prices.

In the end, it seems that these hearings, like so many others, will become little more than a political spectacle — a distraction designed to placate voters, while behind the scenes, business as usual continues.