South Africa Firm on Fight Against Graft

S. African President Cyril Ramaphosa says over 8 bln rand recovered in the fight against corruption

 In an effort to combat corruption, South African President Cyril Ramaphosa revealed that the establishment of the Special Tribunal has resulted in the recovery of 8.6 billion rand (570 million U.S. dollars) from unlawful contracts.

“For any fight against corruption to be deemed effective, it is not sufficient that perpetrators are prosecuted. The proceeds of their crimes must be recovered,” Ramaphosa said in his weekly newsletter.

Ramaphosa said since the Special Tribunal Court was set up in 2019, this amount of money had been recovered from companies involved in corrupt state contracts. As a result of creating the Special Tribunal, public funds and state assets lost as a result of corrupt acts are now more likely to be reclaimed in a shorter period, avoiding delays in the high courts, where the Special Investigative Unit must wait its turn along with other litigants.

“Over the past few weeks alone, the Tribunal has reviewed and set aside more than R100 million worth of irregular and unlawful contracts arising from COVID-related procurement,” he said.

Ramaphosa said that while the funds recovered were good in the fight against corruption, it would take time to “unravel the vast webs of patronage that had become entrenched.”

He warned that the state capacity has been eroded by these corrupt relationships. The state has been hampered in offering decent healthcare and delivering clean water, and in ensuring a consistent supply of electricity for communities and businesses.

Investments Needed

Economists welcomed the State of the Nation Address (SONA) which focused on addressing challenges hampering economic growth and investment, saying there was a need for huge investments in the economy to stimulate growth.

 “There’s a need for a huge investment into the economy to stimulate and unlock economic growth,” Duma Gqubule, Economist and Director at the Centre for Economic Development and Transformation said.

 Gqubule added that the government should be driving investment in the economy to spur growth, Xinhua news agency reported.

 “You have to spend money to get growth. You can’t get growth if you’re not spending. Business can’t invest into an economy that’s not growing,” he told Xinhua.

 According to him, there was not enough money to buy the goods that were being produced.

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 He was responding to President Ramaphosa’s SONA speech, in which he said plans had been put in place to accelerate the implementation of structural reforms to modernise and transform industries, unlock investment, reduce costs, and increase competitiveness and growth.

 The speech acknowledges the “electricity crisis is one of the greatest threats to economic and social progress”.

 Ramaphosa promised to tackle red tapes that hindered businesses and economic growth.

 He said the government has designated a “red tape team” to streamline the processes relating to international trade, property registration and construction permits.

 The President also said the government was working hard to “modernise” the visa application process to make it easier to travel to South Africa for tourism, business and work.

 Efficient Group Economist Dawie Roodt told Xinhua that the speech demonstrated the President’s awareness of economic problems but doubted whether the state was on track to address them.

 Labor Federation Cosatu spokesperson, Sizwe Pamla said the state should fix deteriorating state-owned entities (SOEs).

 “The government needs to urgently work with labor to develop turnaround plans that will help stabilise, save, and rebuild these SOEs,” he added.

 “We cannot afford to have workers who are forced to sit for months on end with no pay or the mass retrenchments that are currently taking place in these state companies,” he said.