Greedflation - How ending corporate greed could once again fill our fridges

There seems to be no brakes on corporate profiteering in South Africa. 

This is causing untold damage to the average South African household, particularly the most vulnerable in society. I don’t see any discussion about the obvious link between corporate profiteering and inflation. The Reserve Bank has its myopic inflation-targeting strategy, increasing interest rates.

Listed companies operating in South Africa, such as banks, mines, retailers and even food manufacturers, mostly report record profits, beating inflation.  

Corporate executives earn obscene salaries, mega bonuses, and gain from share incentives, encouraging them to create profit-making schemes that often land in disasters like Tongaat-Hullet, Steinhoff and EOH. Professor Emeritus at the University of Essex and the University of Sheffield Professor Prem Sikka have used the term Greedflation to describe this phenomenon.  

Many of these corporations are foreign companies that own South African assets such as our mines and will pay these mega-profits as dividends that leave this country.

It’s time for a change: 

·       Shareholders should become more active in corporations and stop rubber-stamping executive pay practices. 

·       Non-executive directors should be chosen from a wider pool, not just from a coterie of connected people. They should be chosen from varied backgrounds and compulsory worker representation. 

Given South Africa’s history, the Competition Commission should have more teeth and budget. We still have only five banks, five major retailers and a handful of long-term insurance companies. 

The South African banks and their supporters laud the virtues of our banking system, never once considering that a bank operating with first-world goals and values does not serve a developing economy.  

To reduce inflation, the Treasury needs to make some changes to ensure better competition in the markets, which will halt high inflation by bringing in more players. 

The ability to transform our economy is better served by breaking up apartheid institutions like the banks. The media, often owned or funded by large corporations, don’t want to inform the citizens of the obvious corporate profiteering that comes with inflation. That would not be in their best interest.

It's time we took a stand against this practice.