A Plea for South Africa’s Chronically Indebted Poor…

By any objective measure, South Africa’s transition from Apartheid to Democracy has been a resounding success. Over 2 terms (the first under the leadership of Nelson Mandela and the second under current President Thabo Mbeki), the ruling African National Congress (ANC) has made unprecedented strides in providing basic services (from running water to electricity to low-cost housing) for millions of blacks who before had known nothing but conditions of extreme poverty.

In fact, the ANC has done more for its previously disenfranchised and economically marginalized citizens in 10 years than successive American governments did for emancipated blacks over a 100-year period. Moreover, as the opening phase of a comprehensive plan to build the country’s infrastructure and empower its citizens, the ANC’s record stands in stark contrast to the political oppression and economic exploitation that South Africa’s blacks suffered for over 300 years under white dominion.

Yet, all is not well. And to be fair, no one seems more acutely aware of his country’s shortcomings than the enlightened and visionary Thabo Mbeki. Indeed, I suspect that he – more than anyone – finds reprehensible the commercial practices that keep blacks mired in economic conditions that smack of indentured servitude.

The South African Parliament where MPs are considering a National Credit Bill which many government supporters fear does not do enough to redress claims and practices by national Credit Bureaux that keep many poor people (most notably enterprising blacks) mired in a quick sand of debt!

Therefore, on behalf of Anti-apartheid comrades in the diaspora who are now true friends of South Africa, I feel constrained to make this deferential enquiry into the country’s National Credit Bill: A bill which we would have expected the ANC to strengthen in the interest of poor blacks rather than structure in the interest of predominantly white businessmen.

The most salutary provisions of the National Credit Bill are those that are intended, inter alia:

…to promote black economic empowerment and ownership within the consumer credit industry…to repeal the Usury Act, 1968, and the Credit Agreements Act, 1980; and to provide for related incidental matters.

And, that’s all well and good. But one does not have to be one of the millions of chronically indebted and unemployable university graduates to have grave concerns about the most glaring defect in this Bill: namely, its failure to grant amnesty to thousands of South Africans who are being exiled to an economic sub-culture because of blacklisting by Credit Bureaux. After all, even leaders of the ANC’s governing alliance, COSATU and SACP, have challenged the ANC to amend and move this bill in the public interest: They argue that:

South Africans pay more than 360% a year in interest on unregistered micro-loans. It is no wonder that millions of our people are caught in debt spirals and end up blacklisted. It is time to wipe the slate clean and close this chapter of massive exploitation of the poor.

Moreover, when one adds to these adhesive interest payments the crippling fees and transactional costs poor South Africans must pay for the privilege of maintaining a simple bank account, only then does one get a sense of the scope of unfairness that the National Credit Bill really must redress.

Many of us who know educated and enterprising South Africans find it incomprehensible that the government would brook bank policies and debt collection practices, let alone enact legislation, that perpetuate the myriad forms of usury this bill purports to repeal. After all, we know first hand how badly these entrepreneurs – who want nothing more than to contribute to the development of their country – are handicapped by credit blacklists. And we sympathise with the despair they express over the Hobson’s choice that each seems fated to confront; which is:

Whether to seek economic emancipation abroad the way their forefathers sought political asylum or stay at home and struggle to live and work with dignity despite being hounded by unscrupulous debt collectors the way black political dissidents were once hounded by Apartheid’s Koevoet?

Nelson Mandela and Thabo Mbeki: Arguably two of the most influential statesmen of our time and, by acclamation, the most distinguished and revered black leaders to ever grace the world stage…

It is clearly untenable for South Africa’s potential business and political leaders to be labouring under such frustrating states of consciousness. Therefore, we make this solemn plea for the governing ANC to use its power to unshackle the aspirations of these talented and ambitious citizens by granting them unconditional debt amnesty.

Because failure to do so would exacerbate not only the country’s unemployment but also the brain-drain of South Africans who emigrate to places like Canada, Australia and Britain; never to return for fear of being marginalized in debtors’ subculture for the rest of their days. And, this alone should render moot the concerns some MPs have expressed about the adverse impact a grant of amnesty would have on the national economy.

Alas, if South Africa can lead African nations in demanding debt forgiveness for international loan obligations that were assumed under duress and which they have no hope of ever paying off, then why, pray tell, would the government of South Africa not grant the same dispensation to its own people where the case for debt forgiveness is even more compelling (economically, politically and morally)?

Note: There is profound commiseration amongst poor people throughout the Caribbean (and even in the United States) with the credit and banking woes that consign so many South Africans to a de facto debtor’s colony. And, those of us who advocate for their economic liberation remain dumfounded by the willingness of black leaders in this part of the world to support legislation and policies that further business interests but do little to empower the poor.