Why a white minority continues to dominate South Africa’s economy

A serious conversation about the continued racialisation of wealth, inequality and poverty is needed.

Yet the problem for the EFF, and those who simplistically target WMC, is the dismal nature of their sociology.

White monopoly capital was at its most cohesive and concentrated during the late phases of apartheid.

In 1981, over 70% of the total assets of the top 138 companies were controlled by state corporations and eight privately owned conglomerate.

These spanned mining, manufacturing, construction, transport, agriculture and finance.

Further concentration followed the mounting political crisis of the 1980s.

Foreign companies disinvested and sold their assets locally.

Unable to invest abroad during late apartheid, the conglomerates invested their excess capital by buying local assets that were often distant from their core business.

By 1990, just three conglomerates – Anglo-American, Sanlam and Old Mutual – controlled a whopping 75% of the total capitalisation of the Johannesburg Stock Exchange (JSE).

Given the overwhelmingly domestic and white nature of the ownership of these companies, as well as the astoundingly high level of concentration of capital in a handful of conglomerates, we could fairly – even usefully – refer to “WMC”.

But things have changed considerably since then.

The democratic era that started with the ascension to power of the ANC in 1994 has seen major changes in a corporate structure which had historically revolved around a minerals-energy-complex dominated by the major conglomerates.

The opening of the economy to the global market post-apartheid, led to major processes of “unbundling”, as conglomerates shed their “non-core” assets in search of “shareholder value”.

By 2016, Anglo-American’s share of market capitalisation on the JSE had shrunk to as low as 15%.

In addition, foreign money poured in, some to purchase unbundled assets, some to invest in an expanding financial sector.

Yet some simply sought to make short term returns from high interest rates.

Correspondingly, the role of the banks and private investment institutions increased.

By 2010, financial institutions (14%) – along with mining houses (37%) accounted for over half of market capitalisation of the JSE by 2010.

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