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The missing ingredient for economic growth? Orange overalls for the venal and corrupt

Paul Hoffman
By Paul Hoffman
29 Feb 2024
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When South Africa was filled with hope and promise, buoyed by the vision of a ‘rainbow nation’, it entered into four disastrous contracts – the arms deals – that forever shattered the innocence of the new democracy.

It is a little tedious to have to point out the obvious repeatedly, but when the future of the country is at stake, one cannot be too careful.

Recently Accountability Now took the Institute of Race Relations to task for failing to include a clear strategy to counter serious corruption in its suggestions supporting economic growth.

Now it is necessary to draw the attention of Business Maverick editor, Tim Cohen, to the missing ingredient in his one-sentence formula for much-needed economic growth. In his 29 February “After the Bell” column (“Do 18 million handouts compensate for low economic growth?”) he says, in one long sentence, that the trick is to:

“Invest in human capital, technological innovation, and infrastructure; develop an effective, simple regulatory framework that’s transparent, fair, and that protects property rights; keep your macroeconomy stable; liberalise trade; support large, medium and small businesses (all of them); promote entrepreneurship; protect the environment; encourage social inclusion; and collaborate with as many other countries as you can.”

These sensible suggestions may well work in a functioning constitutional democracy in which the rule of law is intact and the treaty obligations of the government to establish and maintain effective and efficient anti-corruption machinery of state are fully respected and meticulously implemented.

South Africa is not such a country. We languish on the Financial Action Task Force (FATF) grey list and are likely to continue to feature on it until the government gets serious about implementing the decisions of the Constitutional Court in the Glenister litigation and honours its treaty obligations already referred to above.

According to Transparency International, South Africa has slipped to “flawed democracy” status and has achieved its worst score yet on the Corruption Perception Index that is put out each year by TI.

The various kinds of investment to which Cohen refers are necessary, granted, but they do not take place in a vacuum. The business confidence required to unlock them has to be generated if the flight of capital from our shores is to be reversed.

The worst fears of Thabo Mbeki as he stood before the gathering Zuma tsunami in 2007 have been realised.

When South Africa was a new democracy, filled with hope and promise, buoyed by the vision of a “rainbow nation”, it was tripped up by the false promises of the international arms industry and lost its innocence by entering into four disastrous contracts – the arms deals – that forever shattered the innocence of the new democracy.

The trajectory since the arms deals has been ever downward. Travelgate – the abuse of travel allowances in fraudulent ways by far too many parliamentarians – followed and soon the ANC, via its investment arm, Chancellor House, was in bed with Hitachi in a company that earned it billions that it was not entitled to have in any way, shape or form.

Hitachi was heavily fined under the US Foreign Corrupt Practices Act, the ANC sails on with complete impunity.

The less said about the State Capture processes the better; Chief Justice Raymond Zondo has said it all in his report and recommendations on how to avoid a repeat – recommendations the ANC seems loath to implement for fear of prosecution of its own leadership.

After the “nine wasted years” of the Zuma presidencies, covidpreneurism raised its ugly head. This is a clear indication that those with their hands on the levers of power have lost their moral compasses in favour of an amoral descent into venality which they justify with the mantra, heard so often in failed states in Africa, that “it’s our turn to eat”.

The worst fears of Thabo Mbeki as he stood before the gathering Zuma tsunami in 2007 have been realised. According to his biographer, Mark Gevisser:

“For Mbeki and those around him, the possibility of a Zuma presidency was a scenario far worse than a dream deferred. It would be, in effect, a dream shattered irrevocably, as South Africa turned into yet another post-colonial kleptocracy; another ‘footprint of despair’ in the path of destruction away from the promises of uhuru.” (Thabo Mbeki: The Dream Deferred, 2007, page xli).

Nothing that has taken place since Zuma fell from grace suggests that the trajectory of the country has been effectively corrected. Zuma was succeeded by his deputy, Cyril Ramaphosa, who was in charge of cadre deployments at national level all through the height of State Capture.

He insists that cadre deployments in the public administration, the SOEs and even on the Bench should be the order of the day and he defies the recommendation of the Zondo Commission that cadre deployment be ended because it was a cause of State Capture in the Zuma years.

The reforms of the operational capacity and structures of the criminal justice administration currently under contemplation by the governing ANC fall far short of what the law requires and of the duty of the state to honour its international treaty obligations.

Currently more is spent on VIP protection than on the Hawks, who have the legislated duty to investigate all priority crimes, including serious corruption.

In these circumstances, the unlocking of new investment is bedevilled by a lack of business confidence, a well-justified lack given the extent of looting and pillage that has taken place in South Africa, leaving the poor ever poorer, the hungry starving and the unemployed despairing of ever getting the type of job that renewed economic activity would bring.

Economic growth is key to getting South Africa out of the hole in which we find ourselves. The necessary investments in new infrastructure, start-up businesses and all manner of economic activity will not eventuate unless business confidence is restored via ending the impunity of the corrupt.
Effectiveness and efficiency in anti-corruption activities seems to be the last thing the ANC actually wants. Too many loyal cadres will bite the dust if independent, effective prosecutions become the order of the day.

Not only will the issuing of orange overalls to those deserving of prison garb tend to deter those who wish to board the gravy train of rampant corruption, it will also be the signal to the waiting business community that new investments will not be looted, the rule of law will hold and the prospect of a good return on investments made will be rosier.

It is not realistic to ignore the role that corruption plays in setting the stage for new investment.

Furthermore, opposition parties both in Parliament and in the ranks of newcomers to the political stage are ad idem that the line taken by the governing alliance at national level is an inadequate response to the rampant levels of corruption abroad in the land.

The DA has two private members bills in the works in Parliament that are based on suggestions made by Accountability Now in 2012. The idea that informs the bills is that proper compliance with the Glenister decisions should and could be achieved by establishing a new Chapter 9 body to prevent, combat, investigate and prosecute serious corruption and organised crime.

Read more in Daily Maverick: Economic growth is simply not possible in the midst of serious corruption

The government is obliged to implement the decisions in Glenister. It has not done so. It should be looking, with great care and attention to detail, at making the DA’s bills better than they already are.

Instead, tinkering uselessly with broken existing structures is the order of the day in Luthuli House. Effectiveness and efficiency in anti-corruption activities seems to be the last thing the ANC actually wants. Too many loyal cadres will bite the dust if independent, effective prosecutions become the order of the day.

The one-sentence formula by Tim Cohen is sound in economic theory, but it won’t work for South Africa while the scourge of corruption is left unattended. Greater attention needs to be paid to conquering the corrupt, lest they conquer the country first. DM

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