Institutional investors and large pension funds were sharply criticised at the annual Black Business Summit for failing to deploy capital into projects that could generate jobs and expand industrial activity in predominantly black communities, delegates said on Wednesday.
Speakers say capital exists but flows to the wrong places
Veteran business leader Irene Charnley told the summit that political influence held by black South Africans has not translated into meaningful economic ownership. She argued the country’s financial resources are concentrated with institutions that are not prioritising transformation and job creation.
"Do you own the economy? No. Have you got an input in the economy? No,"
Charnley told the gathering that South Africa already possesses much of the industrial infrastructure required to expand manufacturing and other productive sectors, but the challenge is redirecting capital and deploying technology to build new industries and raise productivity.
She specifically pointed to large pools of pension assets and funds linked to state-owned entities as under‑utilised sources of investment for industrial projects that could create employment and build black-owned businesses. Charnley rejected the idea that the country faces a shortage of investment capital, saying instead that the problem is that "the wrong people are controlling it" and that a greater portion should be channelled into transformation activities.
Calls for a share of pension assets for industrialisation
Charnley suggested that even a relatively small reallocation of existing institutional capital could have meaningful effects. Summit speakers contrasted the size of available reserves with the limited amounts directed to projects that create local jobs and spur ownership by historically disadvantaged entrepreneurs.
Her comments singled out funds associated with large employers and state entities, saying these vehicles have the potential to finance industrial development if governance and investment priorities change.
| Institution | Role described at the summit |
|---|---|
| Pension funds linked to Eskom | Potential source of investment for industrial projects |
| Government Employees Pension Fund (GEPF) | Named as an example of large capital pools that could be redirected |
| Other state‑owned entity funds | Described as under‑leveraged for transformation |
At the same event, Anglo American South Africa chairperson Nolitha Fakude emphasised the state’s role in shaping an environment that supports business growth while ensuring companies meet transformation commitments. Fakude said government must create conditions that encourage investment into projects that will broaden ownership and create sustainable jobs.
Practical proposals and the limits of current practice
Speakers at the summit did not present detailed policy blueprints, but their interventions underscored several recurring themes: the need for institutional investors to align more closely with national industrial goals; improved governance and accountability in how large funds decide allocations; and public policy that incentivises or mandates a greater share of capital for transformation-aligned projects.
- Reallocation argument: Summit participants argued for redirecting a portion of existing pension and institutional assets into job‑creating industrial activity.
- Focus on ownership: Delegates urged that investments should foster growth of black-owned businesses and meaningful participation in ownership and decision-making.
- Government's enabling role: Speakers said state policy must both incentivise and regulate to ensure transformation targets are met.
The discussion reflects long-standing tensions between the concentration of financial assets in large institutional hands and the urgent need to create jobs and broaden economic participation. South Africa’s unemployment rate, and the persistence of concentrated ownership, have kept transformation and industrial policy on the national agenda, but summit participants argued current capital allocation strategies are insufficiently focused on those goals.
Any move to redirect pension or institutional capital would raise complex governance, fiduciary and regulatory questions. Pension fund trustees and investment committees are bound by fiduciary duties to act in members’ best financial interests, and changes to allocation mandates would require either internal decisions by fund managers or changes to the regulatory framework that governs those institutions.
Speakers at the summit called on both the private sector and government to engage constructively on mechanisms that would allow large pools of capital to support industrial projects while protecting retirement savings. The debate is likely to resurface in policy forums as stakeholders weigh how best to balance transformation imperatives with financial prudence.
WE NEWS does not provide financial advice.
