How American banks supported apartheid in South Africa



The banking system in America kept funneling funds to South Africa

At the height of colonial repression in South Africa under the racialist policy of apartheid, the leaders of the so-called “free world” not only condoned the deplorable situation but actively worked to keep it alive. This was done through foreign direct investment as well as loans provided by banks from the United States of America.

The position adopted by the American elites in political and financial circles was premised on economic interests – the insatiable desire for mega-profits – rather than caring about the political situation. The banking system in America kept funneling funds to South Africa, and this money was mostly used for defense purposes. And this was causally linked to the oppression of black people and using them as a cheap source of labour.

In 1976, it was reported that American banks had loaned out at least $777 million to prop up the white minority regime. Some of the banks included New York Citibank, Chase Manhattan, Morgan Guaranty Trust, Manufacturers Hanover, Orion, Bank of America, First National City, Chemical Bank, New York Trust Company, Irving Trust Company, Continental Illinois Bank and Trust Company and, First National Bank (Chicago).

In the book “Portugal’s African Wars: Angola, Guinea Bissao and Mozambique” by Arslan Humbaraci and Nicole Muchnik, the authors took their time to explain why Western financial investments were eager to support the South African white minority government. They argued that the aim was to exploit the cheap labour for immediate returns. The authors highlighted that rates of return on American direct investments in South Africa averaged at roughly 19% per year, against an average return on similar investments of no more than 2%.

This is echoed by the sentiments of William E. Schaufele, Jr. who was the Assistant Secretary of State for African Affairs. In 1976 he remarked, “I recognize that our primary long-term interests in Africa are – and will remain – economic. We must not let the present political problems in southern Africa distort our perception of that reality.” This was the prevailing view among the elites in the global north, who cared little about the political situation not only in South Africa but the rest of Southern Africa as well.

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