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South Africa’s media: He who pays the piper, calls the tune

South Africa’s media: He who pays the piper, calls the tune
  • PublishedSeptember 8, 2014

The nature of media ownership in South Africa has inevitably changed following the fall of apartheid. But as Mushtak Parker reports from Cape Town, this relates more to the colour of the new owners rather than the structures. The South African media has always had two types of owner: government-linked entities and powerful corporates, and they have an impact on the nation’s psyche.

Over the past year, South Africa has seen a controversial ownership of the media by investors from emerging non-European countries and Broad-based Black Economic Empowerment (B-BBEE) companies close to the ruling African National Congress (ANC).  

Media owners are usually the bane of governments, often bent on reining them in if their outlets are deemed to be too critical. In a democracy this is even more difficult given the supposed safeguards relating to press freedom, the right to free speech and nowadays, a cornucopia of freedom of information legislation.  Not that foreign media ownership is new or undesirable in South Africa or elsewhere. But there are rising concerns regarding media groups in South African press politics and structures.

One of the media groups involved is Independent News & Media South Africa Ltd (INMSA), the country’s second-largest media house with titles such as Cape Times, Cape Argus and The Star. This was formerly part of the Irish-owned Independent News & Media Group, headed by Tony O’Reilly, the former chief executive of the Heinz Group in the US.

The other new media group, which is even more controversial, is TNA Media, which owns The New Age Daily and is part of Infinity Media Ltd, which also owns ANN7 (Africa News Network), and describes itself as a “trendsetting 24-hour news channel” – in fact the first such news broadcasting licence to be issued in the country for the last two decades. 

Both TNA Media and Infinity are controlled by India’s Gupta family, who are currently embroiled in the Guptagate scandal, relating to a civilian plane chartered by the Guptas and carrying 270 guests to a wedding at Sun City, that landed at Waterkloof Air Force Base in April last year.

Infinity shareholders include Essel Media (35%), Oakbay Investments, the Gupta family’s investment vehicle (35%), Mabengela Investments, a South African B-BBEE company (21%), and a further 9% is reserved for staff and management. 

The biggest shareholder in Mabengela Investments is Duduzane Zuma, son of President Jacob Zuma, who holds a 45% stake, with other shareholders including Rajesh Kumar Gupta (25%), Aerohaven Trading (15%), Fidelity Investments (10%), Mfazi Investments (3%) and Ashu Chawla (2%). The Gupta family is seemingly very close to President Jacob Zuma.

Tony O’Reilly, with Nelson Mandela’s blessing, bought the Cape Times and Argus Group from Anglo American, the giant mining conglomerate, for a song, but sold the company to a South African/Chinese consortium for R2bn. 

Today, the South African newspaper industry is dominated by four main players – Media24, which is largely owned by Naspers; Independent Newspapers; the Times Media Group and Caxton CTP. What is increasingly evolving is the changing nature of media ownership under the guise of B-BBEE and supported by trusted and selected foreign investors, including those from China and India. 

Makhtar Diop, the World Bank vice president for Africa, is not unduly worried about increased Chinese investment on the continent per se. “China and Africa,” he posits, “have a long history of cooperation, and there are genuine and broad-based interests that both China and Africa share. They have to strengthen their ties and share relevant experience and lessons in their economic development. Since 2009, China has become Africa’s largest trade partner, and Africa is the main destination of Chinese investment overseas. While serving its needs to support rapid economic growth at home, China’s investment activities have greatly contributed to Africa’s development.”

He goes on: “What China should do is continue to broaden its collaboration and support more areas of investment, including in the private sector to sustain Africa’s development, create more jobs, and foster and strengthen economic resilience and local industrial capacity. Let’s not forget that Africa needs the investment, Africa needs job creation and actual trade. I think that this discussion is not being held as objectively as it should be. Ultimately, let’s not forget that the responsibility for how China and its private sector engages in Africa lies with African governments themselves.”

Perhaps it is not surprising that this media ownership merry-go-round appears to have come full circle, and is perhaps even an inevitable riposte to white dominance of the press in the halcyon days of apartheid. Yes there were notable exceptions such as Donald Woods, editor of the Natal Witness, which exposed the brutal murder of Steve Biko, the Black Consciousness leader; and Tony Heard, editor of the Cape Times. 

Written By
Mushtak Parker

Mushtak Parker is Editor of Islamic Banker Magazine, one of the foremost journals in the industry with a global circulation in the major Islamic Financial institutions.

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