The economy they say is controlled by banks. Banks are intend controlled by the clients whose loyalty to them is vital. Reuters news of 6th September stated that the worry of most South Africans is that three of their top four banks have a substantial foreign owner. As it stands, Standard Bank is 20 percent owned by Industrial and Commercial Bank of China, while Absa is majority owned by Britain's Barclays. Now there is an approved HSBC's $8 billion bid to buy 70 percent of Nedbank. This leaves only the FirstRand under total domestic control. Who knows, as you read this article, there might be a deal on the way for FirstRand too.
However, most industry insiders view HSBC as a stronger foreign owner for Nedbank than Old Mutual, which has its roots in South Africa but is now based in London. Currently, Old Mutual said it would apply for permission to the central bank to take out 1.5 million pounds ($2.32 million) of the proceeds to pay down debt (capital flight). The rest of the money it says would remain in South Africa. Some analysts claim that the deal would be positive for the rand while others disagree. Addressing businesspeople on September 2nd in Soweto, the Reserve Bank Governor Gill Marcus is quoted on www.busrep.co.za as saying “ownership in South African banks was a difficult question and needed careful consideration, because in South Africa, it's more complex. We have ownership that's mixed. Mixed ownership of banks does have risks. "It does create a situation of complexity and that needs careful consideration in my view,".
As a developing country, economist may argue that such investment gives a positive image to the country and even to the rand. What most of them and ever the Bank’s shareholders do not consider is the fact that foreign ownership leads to more foreign workers and this subsequently leads to more capital flight from the country.
However we look at the ownership and control of South Africa banks, it is important to be conscious of the fact that development has a price. That price could lead to complete foreign control of many sectors and industries as in the case of many developed countries.