PIC’s problems are structural and not just due to individuals
Dominic Brown |CGTN Africa | 26 July 2019
Former PIC CEO and CIO Dan Matjila has admitted that senior politicians and other influential people have tried (and seemingly succeeded) to direct PIC investments towards advancing their self-interests underlying the problem of corruption at Africa’s largest asset manager.
Unfortunately the focus by most commentators has largely reduced the problem at the PIC to individual transgressions. While there is truth to the reporting that corruption at the PIC was facilitated by a individuals, it has not happened in a vacuum.
In fact as, Alternative Information and Development Centre (AIDC) Economic Justice Programme Manage, Dominic Brown shows, the corruption at the PIC must be understood within the context of an accumulation regime concerned with building a black capitalist class. Key methods used to achieve this include traditional cronyism and the PIC purchasing unlisted shares to facilitate “transformation”.
At the core of this is the reality that the “black” capitalist class had no capital to speak of when the ANC came to power and as a result the state, and by extension the PIC, became vehicles for building this class. What this means is that greater structural transformation is required in order to mitigate against similar corrupt practices in the future.
The scrutiny that the PIC is under allows us to begin the process of rebuilding the asset manager, an upcoming publication by the AIDC will show how any change in the PIC will require:
- Shifting the Pension Fund back from Fully Funded to Pay-as-you go (PAYG)
- Changing its mandate to include the explicit funding of long-term public investments
- Greater transparency in how the PIC is managed and the conditions of all investments.
Read Dominic Brown’s “PIC: The financing of a Black Capitalist Class” for the analysis in full.