Mutumwa Mawere

The end of apartheid in 1994 should have brought to an end the use in post colonial Africa of the following terms: colonialism and anti-colonialism, imperialism and anti-imperialism, capitalism and socialism and communism, class warfare, white supremacy and non-white resistance. These ideas during the decolonisation period, however, generated powerful anti-British, anti-Dutch, anti-French, and anti-American nationalist sentiment.

South Africa with the largest white settler community in Africa is the most developed country in the continent having inherited a sophisticated financial, mining and industrial infrastructure from the colonial/apartheid state.

To the extent that South Africa's economic civilisation is the most developed one in Africa, it is important that we attempt to locate the direct cause of the emergence of modern South Africa, that is, what explains the sustained orientation of this economy, which distinguishes it from all other African economies, in terms of growth.

It is also important to answer the question of what made the economic sphere so central to the colonial/apartheid state in terms of the consciousness that the civilization that informed the colonial state was underpinned by an economic system that persuaded millions of men and women of European origin to put their trust in economic growth as the necessary and sufficient condition of social growth and political happiness.

Political nationalism was at the core of the anti-apartheid movement and yet in post colonial Africa no serious attempt has been made to critically examine the interplay between economic and political nationalism.

Economic nationalism is a unique form of nationalism that has at its core a social consciousness informed by a compelling and inclusive image of a sovereign society of fundamentally equal members. However, the economic nationalism that informed the colonial state was race-based and sought to segregate the nation into ethnic economic groups.

In the case of South Africa, the pre-World War I period was dominated by English speaking people who controlled the commanding heights of the economy.

A movement aimed at achieving greater control by Afrikaners of the South African economy arose in response to the high degree of control by English-speakers. The rapid rise of English speakers' ownership and control of the South African economy was attributed not only to their control of the state but to their organisational abilities as well as links to international capital.

Institutions like Old Mutual having been established in 1845 provided English speaking entrepreneurs with capital required to invest in the country's enormous economic potential.

The early transformation of South Africa into an industrialised economy was financed and dominated by English speaking people resulting in resentment by the Afrikaner population who felt increasing marginalised although they shared the same European heritage.

In December 1917, six Afrikaners, including National Party founders Willie Hofmeyr, Fred Dormehl, and Peter Malan; and a Scot, Mr. Alfred McDowell, met in the Royal Hotel in Cape Town to establish a new mutual aid society, Suid-Afrikaanse Nasionale Trust en Assuransie Maatskappij (Santam) that was registered on 28 March 1918 with Mr. Hofmeyr as the founding Chairman. Hofmeyr, Dormehl and Malan were also founders of Nasionale Pers.

In 8 June 1918, the Suid-Afrikaanse Nasionale Lewens Assuransie Maatskappij Beperk, Sanlam, was registered as a wholly owned subsidiary of Santam.

Sanlam/Santam has been considered the quintessential representative of Afrikaner nationalism. Not only did the company enjoy enormous privileges during apartheid, but also counted on the colonial/apartheid state to accumulate capital and extract higher rents from the model.

Sanlam/Santam was a positive product that emerged from the failed coup to topple the government of Louis Botha by Afrikners rebels who had sided with the Germans during the First World War. That was the point when the Afrikaners decided that together they could compete more effectively against the English speakers.

The need to assert their political and economic rights gave rise to a new initiative among the Afrikaners, the informally adopted idea of "helpmekaar" (literally "help each other"), giving rise to the formation of Sanlam and Santam as short term and life insurance new mutual aid associations, respectively.

Sanlam/Santam was initially entirely funded by Afrikaners, and operations were restricted to the Afrikaner population. Sanlam soon moved to cover the growing number of Afrikaans-speaking city dwellers. In 1928, the company extended its reach to include South West Africa, then a protectorate of South Africa and later to be known as Namibia. In 1943, a formal independent branch office, which became Sanlam Namibia, was established there.

By the mid-1930s, Sanlam became the dominant partner of the Sanlam-Santam business model through the transfer of Santam's own life insurance operation, African Homes Trust, later renamed Metropolitan Life, to Sanlam.

In 1940, Sanlam launched the Federale Volksbeleggings (FVB), which used the funds generated through the company's policy holders to invest in the country's industrial and commercial infrastructure to serve the interests of the Afrikaner community.

In pursuance of its objective to leverage the position of the Afrikaners in the colonial state, Sanlam built up significant stakes in most of South Africa's major Afrikaner-backed corporations, including the creation of mining giant Gencor in the 1950s.

In 1946, Sanlam created a second investment vehicle, Bonuskor, which used policy bonuses as the basis for providing capital for establishing and expanding Afrikaner-led businesses.

Another company in which Sanlam became a shareholder of was the National Party newspaper Die Burger, founded by Hofmeyer in 1915.

When the National Party gained control of the South African government in 1948, Sanlam's star rose as it was closely associated with the apartheid state.

Sanlam was able to build up a significant asset management business that included the Volkskas, as a banking vehicle for the South African government.

Through the assistance of the apartheid state, Sanlam gained control of the government's pension funds.

Other Sanlam investments included the distribution vehicle Tradegro that owned and controlled the Checkers retail empire.

In 1954, Sanlam converted into a mutual life insurance company and it became Santam's majority shareholder.

In 1960, Sanlam created a banking group, Sankor, to target large-scale developments for its investments.

In 1985, Sanlam launched a new business, Sankorp, in order to extend its development investments whose investments included: Gencor, Billiton, Murray & Roberts, Sappi, and Genbel, etc.

It was only during the early 1980s that Sanlam begun to look for business outside the Afrikaans-speaking population.

The company's Tradegro group crashed after the Checkers chain was crushed by rival Pick n' Pay.

In the 1980s, also, Sanlam's Bankorp collapsed, requiring a government bailout that cost its policyholders more than ZAR1 billion.

Following the bailout, Sanlam sold Bankorp to ABSA in exchange for a 25 percent stake in the South African bank.

The end of apartheid and the collapse of the Afrikaner government called for a revised business model as the new ANC-led government sought to alienate the institution from the state. As a result of the switch of pension fund deposits, Sanlam's Volkskas, ceased to exist.

In response to the end of the patronage system, Sanlam began to unbundle many of its investments, such as Gencor, which were split off as separate companies.

Sanlam divested Tradegro, broke apart Federale Volksbeleggings, and dismantled another of its major "pyramid" holdings, Malbak, which had controlled the company's stakes in Foodcorp, SA Druggists, Tedelex, Ellerines, Haggie, Kohler, and other concerns.

Sanlam refocused its operations to asset management, estate and trust planning, unit trusts, and other financial services.

In 1998, the company moved to simplify its structure, transferring its assets management business to Genbel Securities, or Gensec raising its stake in Gensec to more than 66 percent.
In October 1998, Sanlam voted to de-mutualized and list as a public company on the Johannesburg Stock Exchange.

From 1918 through 1998, Sanlam represented a noble idea founded on the principle of mutuality and nationalism.

Old Mutual provided a platform for English speaking settlers to pool their resources for a greater economic good.

Both Old Mutual and Sanlam/Santam provide a useful guide to what is possible when people come together to create institutions to serve them.

It is now 14 years since the end of apartheid and yet the challenge of forming a rainbow mutual remains elusive.

If the English and Afrikaners can do it, I still believe that it is not too late to think beyond the confines of race for what is good for the continent.