Long after the end of political apartheid, economic apartheid persists in South Africa.
Despite its commitment of billions of dollars to a social-investment fund intended to alleviate poverty among black nationals, South Africa is still among the most economically unequal countries anywhere.
According to a World Bank report, the top 1% of all South Africans own more than 70% of the country’s wealth; the bottom 60%, meanwhile, controls just 7% of the nation’s assets.
One of the the problem is the Public Investment Corporation, a US$131 billion dollar fund, and the largest of its kind on the African continent.
Instead of fulfilling its charter to manage and grow government employees’ pensions, the wealth generated from the fund’s investments have often ended up in the coffers of private investment companies.
One such entity, Regiments Capital, used a series of sham sales and buybacks of shares in a South African bank that produced — and misappropriated — massive profits for the company.
The key vehicle for this was the Black Economic Empowerment Initiative, which enabled Eric Wood, the co-founder of Regiments, and who is not black, to take advantage of a fund intended to alleviate poverty among black South Africans.
The Byzantine complexity of this and similar maneuverings by South Africa’s multiethnic power elite has resulted in decades of economic stagnation among black communities.
This sort of mismanagement and misappropriation is nothing new to the Public Investment Fund, which is also under investigation for inflating the value by almost US$1 billion of a technology company that was later revalued at US$68 million.
These and other controversies are now the subject of multiple government inquiries.
Sources: Organized Crime & Corruption Reportng Project, Fin24 (South Africa), TimesLIVE (South Africa)