JOHANNESBURG, SOUTH AFRICA — A comprehensive new investigation answering who owns South Africa has uncovered that a small cartel of private financial institutions controls roughly R6 trillion in pension assets, perpetuating economic inequality while a staggering R51 billion in unclaimed benefits remains unpaid to millions of citizens.
The findings are detailed in the fourth volume of the “Who Owns South Africa?” series by research and advocacy group Open Secrets. The latest report shifts its focus to the administrators of private pension funds, revealing deep-seated structural issues within the country’s financial sector.
Mike Marchant, Head of the Investigation Unit at Open Secrets, elaborated on the report’s findings, highlighting how the concentration of corporate power and historical injustices continue to shape the nation’s economic landscape.
A Cartel Controlling R6 Trillion in Pension Assets
At the heart of the investigation is the revelation that the administration of South Africa’s private pension funds is highly concentrated. According to the report, four financial giants—Sanlam, Old Mutual, Alexander Forbes, and Liberty—dominate the sector, collectively administering approximately 2,500 pension funds.
Marchant noted that this concentration creates inherent conflicts of interest. While these firms act as fund administrators, they frequently select asset managers from within their own corporate groups to manage the funds. This practice, a long-standing concern for regulators, centralizes power and dictates where the massive R6 trillion in assets is deployed.
However, the state remains a formidable player. The Public Investment Corporation (PIC), which manages the Government Employees Pension Fund (GEPF)—the largest single pension fund in the country—accounts for nearly half of the total assets, managing just under R3 trillion.
The R51 Billion Unclaimed Benefits Crisis
Beyond asset concentration, the report exposes a profound ongoing injustice: R51 billion in pension benefits remain unclaimed, affecting more than 4.3 million people across South Africa and neighboring countries.
Marchant described this as a compounding injustice rooted in the exploitative labor and pension systems of the apartheid era, particularly within the mining sector during the 1960s, 1970s, and 1980s. While many mine workers and laborers were brought into the pension system, decades of lackadaisical record-keeping by employers and administrators, coupled with poor regulatory intervention, have left millions stranded.
Today, workers presenting historical employment and deduction records are frequently told by administrators that no records exist. Historical errors, such as the improper cancellation of pension funds, have further compounded the crisis. Despite the financial sector being aware of the issue for years, Marchant emphasized that too little has been done to resolve what is effectively a R51 billion debt owed to the working class.
Short-Termism and the Exclusion of the Informal Sector
The mismanagement and strategic direction of these pension funds affect all South Africans, even the two-thirds of the population largely excluded from the formal economy and formal financial pensions.
Because pension funds are a crucial source of national investment, the R6 trillion they hold has serious consequences for the broader economy. The Open Secrets report critiques a historical shift in investment strategies. Instead of funding long-term, foundational infrastructure like factories, energy, and water systems, pension assets are increasingly directed into short-term financial markets to chase immediate gains.
Furthermore, a significant portion of these assets is allowed to flow outside the country’s borders. Marchant pointed out that South African law clearly mandates that pension fund investments must prioritize the long-term interests of current and future members. Directing these assets toward long-term domestic economic growth is essential for addressing the country’s severe unemployment and inequality crises.
The Ultimate Answer: Who Owns South Africa?
Building on previous volumes of the series—which investigated ownership in the mining, media, and retail sectors—the fourth installment attempts to answer the overarching question: who truly owns South Africa?
According to Marchant, private ownership remains heavily concentrated in the hands of a few wealthy individuals and their associated corporations. He pointed to the enduring influence of entities like Patrice Motsepe’s African Rainbow Capital and Johann Rupert’s Remgro, which exercise massive control across multiple economic sectors.
However, the report also serves as a critique of state inaction. While private corporate power is highly concentrated, the state, through the PIC, holds approximately 13% of the Johannesburg Stock Exchange (JSE).
Ultimately, the investigation concludes that while a small cartel of private institutions wields immense financial power, the state possesses significant leverage that it fails to utilize effectively in addressing the pressing economic and social crises facing the country.
