The writer says the destruction of Ithala Bank is essentially the destruction of the noble sustainable rural development ethos on which the poor rural communities pinned their survival hopes. Picture: Supplied
By Dr Vusi Shongwe
THERE is something seriously wrong with our psyche as black people, which seems to have sustained irreparable and irreversible damage. A psyche of self-hate.
The shocking reported fate of Ithala Development Bank that faces provisional liquidation is tantamount to watching helplessly a counterproductive closure of Mangosuthu University of Technology (MUT), both of which are the most iconic legacies of Prince Mangosuthu Buthelezi.
It should be recalled that the MUT survived an attempt to rename it, sadly by wishing to elevate one outstanding black leader at at the expense of the leader the institution is reverently named after him. The idea was to purposely pit one great leader against another equally great leader.
What is wrong with black people? We have become experts at bewitching the integrity and vitiating the legacies of our great heroes.
Some brief background is needed to understand the predicament Ithala finds itself in. The story begins with the establishment of the Ithala Development Finance Corporation (IDFC) in 1958. Owned by KwaZulu-Natal (KZN), the IDFC is a development finance agency promoting economic growth in the province.
Ithala, a 100% subsidiary of the IDFC, was separated from the IDFC in 2001 following a SA Reserve Bank (SARB) recommendation. The Bank Act does not allow provincially owned state-owned entities to be registered as banks. The Act requires a bank to be a public company incorporated or registered as a national state-owned company under the Companies Act.
This is the genesis of the problems Ithala Bank is experiencing. Credit must be given to His Excellency Inkosi Mangosuthu Buthelezi for establishing Ithala, which was meant to be a development finance agency, promoting economic growth in the province. What a noble and laudable gesture on the part of Buthelezi.
Bishop Alphaeus Zulu recommended the name Ithala for the development bank and he explained Ithala to mean a place where food reserves are kept in the Zulu custom. The food was kept in Ithala. In that context, the Ithala Development Bank symbolised a Zulu custom institutional reserve wherein finance was kept for socioeconomic capacity building of poor communities.
Right from its inception, the approach for establishing the bank was not narrow or individualistic but for promoting economic growth for the province.
The question is why is it that the Bank Act does not allow provincially owned state-owned entities to be registered as banks? Even a highly credible entity like Ithala Bank. The decision to separate Ithala from the IDFC as per SARB’s recommendation was nothing but cheap politics.
It was a negation of anything that had to do with the erstwhile KwaZulu Government. Sadly, in the process of throwing out the so-called “dirty bath water” of the erstwhile KwaZulu Government, things which could have made KZN one of the best run provinces were thrown out with the bath water as occasioned by the misguided fixation of being politically correct.
These are truths that need to be openly acknowledged so that, moving forward, they are not repeated in the event new rulers other than black people rule the country again.
Without intending to enter into that debate, for as long as noble initiatives established by black people are derisively treated like Ithala, white people might rule this country again. Watch the space.
Notwithstanding its challenges, Ithala is to the downtrodden—especially black people—more than a bank. It is their black pride. It is a mega accomplishment. It is an incredible milestone. Can anyone show me one credible bank that has been established by black people post-apartheid? Zilch.
Why then destroy Buthelezi’s legacy, which he painstakingly and labouriously worked hard to create? It is time the teachings of the great Steve Biko are robustly pursued to help exorcise our minds of the spell of self-hate.
The sad thing about Ithala matter is that it appears to be propelled by an explicit revenge politics and a deep hatred for anything that is a legacy of the erstwhile KwaZulu Government—Prince Mangosuthu Buthelezi to be precise.
This is in total disregard of how it affects the poor communities for whom Ithala was established as a capacity building institution.
One egregious assumption by SARB regarding Ithala is the fallacious belief that the bank is sustained by individual contributions. Far from the truth. There are contributions within Ithala that are commercially driven. Areas such as Ladysmith, Mhlosinga, and Mkhanyakude in KZN have had massive commercial undertakings being funded and sustained by Ithala for so many years.
People have established businesses and built beautiful homes in rural areas through the very same Ithala. The National Treasury’s fixation with individual contributions to Ithala is misplaced. The commercial part of Ithala is relatively much bigger than we are made to believe.
It is estimated that Ithala has 65% commercial ventures. MEC Reverend Musa Zondi might know. When Buthelezi established Ithala, his focus was not solely individualistic. His main focus was the establishment of Industrial Development Zones (IDZ) in as far as Ithala was concerned.
So, the National Treasury has been blindsided to that reality. This will lead to a huge crash as things stand. Ithala even went to the extent of building houses (providing mortgages). If one drives into some far-flung rural areas of KZN, one comes across a modern-built first brick house or houses whose mortgages are financed by Ithala.
These are stories that need to be told instead of the negative stuff that is being peddled, causing unnecessary anxieties to those whose contributions are kept by Ithala. Admittedly, like any banking institution, Ithala maybe experiencing problems, but, in my view, they do not warrant for the liquidation of the bank.
Truth be told, Ithala’s problems emanate from SARB’s deliberate lack of understanding why the bank was established in the first place.
Ithala needs to be defended with the same passion, which the mighty warriors demonstrated when they heroically defended the sovereignty of the Zulu Kingdom. The only difference now is that the spears to be used this time around have taken the forms of rationality and intellectualism.
Speaking about intellectualism, Ithala is led by one of the best brains this country has ever produced in the banking sector. I am talking about none other than Dr Thulani Vilakazi, who holds a doctorate in banking. Vilakazi is held in great reverence and respect for the invaluable contributions he has made in the banking community.
Shame on SARB for undoing Buthelezi’s rich legacy, which was meant to extricate the poorest of the poor from the mire of poverty. A legacy that was meant to uplift the downtrodden and inspire hope.
Indeed, there is a need for the undoing of the legacy of self-hate among black people. Given SARB’s allegations against Ithala, it looks like SARB has also simply sealed its own pathetic legacy.
The way SARB handled the Ithala matter has left its credibility in serious doubt. Instead of undoing the legacy of separate development, SARB is hellbent on dismantling Buthelezi’s decorated legacy and further deepening the very same inequality that he sought to eradicate among the downtrodden.
Sadly, the Ithala fiasco has proven embarrassingly that the much-vaunted sustainable rural development concept is a failed project. It is a failed project because Ithala is an institutional machinery of sustainable rural development.
The destruction therefore of Ithala Development Bank is essentially the destruction of the noble sustainable rural development ethos on which the poor rural communities pinned their survival hopes.
* Dr Vusi Shongwe works for the KZN Department of Sport, Arts, and Culture. This contribution is written in his personal capacity.
** The views expressed do not necessarily reflect those of IOL or Independent Media.