SIBONGILE VILAKAZI | Capital is not neutral — how lenders and shareholders shape a nation’s future

Shareholders and lenders play a critical role in supporting stability, growth, and development. Yet their influence is often understated because capital is treated as a neutral input rather than a shaping force in economic and social outcomes. Capital carries posture, intent, and power. How it is deployed determines not only which businesses succeed but also which ideas are allowed to mature, which leaders are trusted, and which futures become possible.

This insight crystallised for me at the Shilumana Group’s annual Chairman’s Conversation on October 23 2025. The event featured Discovery Limited Group CEO and Busa vice-president Adrian Gore in conversation with Shilumana Group chair Given Mkhari, reflecting on Discovery’s origins.

Gore recounted how Laurie Dippenaar, co-founder of Rand Merchant Bank, convinced him to leave Sanlam and funded his salary for three months while he developed a business proposal. If the idea proved viable, Dippenaar would back it; if not, the arrangement would end. Gore produced a bankable concept, and Dippenaar provided the seed capital that led to the founding of Discovery in 1992 — two years before South Africa’s democratic transition.

More than funding, Dippenaar offered patient mentorship and sustained belief during periods of uncertainty. Discovery’s success, therefore, was not simply the result of entrepreneurial brilliance. It was enabled by timely belief, patient capital, and an engaged backer willing to absorb early risk. These invisible enablers matter. Their absence helps explain why many capable ideas and leaders, particularly those shaped by historical exclusion, never reach scale, despite technical competence or market opportunity.

This exposes a structural reality: outside government, there are few comparable “angels” enabling black South Africans to take similar risks at scale. This sharpens the developmental responsibility of the state. Government is not merely a regulator or redistributor; through its institutions it can act as a decisive enabler of enterprise, creating conditions in which talent, ideas, and ambition compound into national assets. When this role is misunderstood or underplayed, the opportunity cost is not abstract. It is measured in businesses that never form, industries that never mature, and leadership capacity that never fully emerges.

The question, then, is not whether government can play this enabling role, but whether it consistently does so with the necessary intentionality, patience, and institutional courage. This question is underscored by a recent expression-of-interest advert issued by the Industrial Development Corporation (IDC) for its 10.2% equity stake in Rossing Uranium Limited. The IDC has been a shareholder in the company for more than 50 years, having acquired the stake after its own establishment in 1940. The advert notes that the IDC has reached the end of its investment horizon and intends to dispose of the asset, implying that the original developmental objectives have been met.

The IDC was created to drive sustainable economic development through financial assistance focused on industrialisation, entrepreneurship, and job creation. Central to this mandate is the provision of patient capital — prioritising long-term developmental outcomes over short-term returns. A five-decade shareholding in a mining venture, typically structured around a 15- to 25-year horizon, is a clear illustration of this approach and of the state’s capacity to anchor long-cycle investments that private capital may avoid.

Since democracy, the IDC’s mandate has expanded to explicitly include transformation and inclusive economic growth, reflecting South Africa’s deeply unequal economic structure. Prospective buyers of the Rossing stake will therefore be assessed not only on price but also on alignment with developmental outcomes, transformation objectives, and sound corporate governance. In this sense, exit itself is a developmental act, signalling what the state values and what it expects to endure beyond its direct participation.

Through development finance institutions and state-owned entities, government can act as a shareholder or lender in sectors critical to national development and industrialisation. In doing so, it has the capacity to shape markets, crowd in private investment, and influence leadership behaviour in firms — not through control, but through the standards it sets and the relationships it builds.

As Gore observed in his conversation with Mkhari, Discovery’s survival during its early and uncertain years was inseparable from the quality of the relationship between entrepreneur and backer. A healthy, engaged relationship between capital and leadership is not incidental; it is central to success, particularly in high-risk or formative stages of enterprise development.

The lesson for public-sector leadership is clear. Development is not driven by capital alone, but by how that capital is deployed, governed, and stewarded over time. Shareholders and lenders — especially those operating under a public mandate — shape outcomes through their posture, patience, and proximity to leadership. Their influence is structural, not neutral.

When development finance institutions behave like distant financiers, they do more than miss returns — they erode the ecosystems they were created to build. When they act with clarity of purpose, disciplined patience, and ethical accountability, they can unlock industries, broaden participation, and materially alter a country’s growth trajectory.

Lenders and shareholders are therefore not passive actors in South Africa’s development story. They are among its principal architects. History will judge government-mandated institutions not only by the capital they allocate but also by whether their stewardship expands or narrows the futures available to the nation.

• Vilakazi is an academic and organisational development practitioner whose work focuses on building ethical, human-centred systems in business and institutions.