Analysis

Mr President, Corruption Didnt Start With PPE Corruption

By Pinky Khoabane

Dear Mr President

YOU seem to have woken up to the rampant theft of public monies by civil servants – to a point of action, that is – since the revelations by the Sunday Independent of runaway looting of the Covid-19 relief fund, in particular the corruption involved in the procurement of personal protective equipment (PPEs) by the husband of your spokesperson Khusela Diko and others close to the political party you lead, the African National Congress. 

You may have been moved – to the point of establishing a structure to investigate those who got tenders for PPEs – on the basis that this act of corruption, unlike others which have cost the country billions, was an exploitation of a “grave medical, social, economic crisis”, as you put it. 

The truth Mr President, is that all corruption, in the lead-up to the democratic dispensation and beyond, have been to the detriment of citizens. You don’t have to be reminded of the devastating impact of the corruption that took place between ANC leaders and the apartheid government, on one hand, and private companies, on the other. 

On December 1, 1993, for example, the Transitional Executive Council (TEC), which prepared South Africa for the country’s first non-racial election in April 1994, accepted an $850 million loan from the International Monetary Fund (IMF). The ANC signed off on this deal in return for the following:

* Lower import tariffs;

* Cuts in state spending,

* Large cuts in public sector wages;

* Free trade routes;

* Excessive flight capital off the borders of SA;

* Privatisation of state owned enterprises;

* Fiscal controlled economy; and

* Moving away by ANC from its historical radical position of nationalisation, including expropriation of land.

In 2013, former Intelligence Minister Ronnie Kasrils reflected on the ANC’s economic policy in Faustian terms. “What I call our Faustian moment came when [South Africa] took an IMF loan on the eve of our first democratic election. That loan, with strings attached that precluded a radical economic agenda, was considered a necessary evil (Kasrils 2013)….”.

He was referring to massive debt the ANC took including  the repayment of the US $25 billion apartheid foreign debt. Money that was used to shoot, maim and kill activists, internally and in the Frontline States. 

Kasril’s usage of “Faustian Pact” in his analysis is exactly what the ANC government did: sold its soul to attain short-term satisfaction of riches, fame, pleasure. In the process the image of the ANC as a revolutionary organisation whose mandate was to capture the state to advance democracy by overturning colonialism and the legacies of apartheid, changed. In addition, it was meant to pursue radical socio-economic transformation for the Black majority. Instead the ANC adopted neoliberal policies. 

In an analysis of the ANC by Dr Khanyisile Litchfield-Tshabalala, she writes:

“No wonder, under the Neoliberalist Reformation Project, the ANC furthered its controversial policy actions:

  • Reappointing Apartheid’s Finance Minister, Derek Keys, together with Reserve Bank Governor, Chris Stals, to oversee the new Neoliberal Reformation Project.
  • Joining the then ANC’s long-life enemy, the World Trade Organisation (WTO), for that matter on the most adverse terms, viz. as a transitional economy vs a developing. This has killed multiple local industries, like the clothing and textiles, appliances and other labour-intensive firms. (It is a house joke that under the ANC, ‘made in SA’ label has vanished – we like them foreign and imported).
  • Agreed to a repayment of the US $25 billion apartheid foreign debt. Money that was used to shoot, maim and kill activists, internally and in the Frontline States, or in the war against the Southern Angola against South West African People’s Organisation (SWAPO), both inside Namibia and Southern Angola. However more concerning, this was money that the ‘new’ Mandela government was supposed to use for socio-economic recovery; for delivering the promises made to Black people, especially Afrikans, in the 1994 Elections.
  • Granted the South African Reserve Bank (SARB) formalised freedom, resulting in autonomy its officials from democratic accountability. This led to the high interest rates of those years, coupled with deregulation of exchange controls.
  • Limiting the redress potency of the Constitution by prioritising embedding property rights. Hence to date, ‘the SA Constitution is acclaimed as the most democratic in the world’. But the question is: democratic for who?
  • Permitting most of South Africa’s ten biggest companies to move their headquarters and primary listings oversees. Herein lies the recipe for illicit financial flows (IFFs), as in loopholes for both tax evasion and avoidance, profit shifting and misinvoicing – resulting in a massive base erosion scheme.”

Transparency

I see in your letter to your comrades, penned over the weekend, that you speak of transparency. As you would know, transparency has not been a strong point of the ANC nor yours, Mr President. Issues of how the top brass in the ANC managed to drive in posh cars while MK soldiers in camps didn’t have basic supplies; the execution of MK soldiers by other MK soldiers;  torture and brutal rape of women soldiers; are issues hidden deeply in ANC history. 

Allegations that the death of Chris Hani, two weeks before a hearing scheduled for Joe Modise to account for allegedly having sold MK arms without consulting proper official channels remains another matter buried in ANC history. 

The multi-billion rand arms deal was shrouded in secrecy. Many ANC leaders bemoaned the fact that the decision was taken undemocratically and was only unveiled to Parliament as a fait accompli. In his book “Thabo Mbeki and the Battle for the ANC”, William Gumede writes that the presidency at the time, which was under the administration of former President Thabo Mbeki, made the final decision to go ahead with the arms deal and “Mbeki chaired the cabinet subcommittee that gave final approval for the contracts”. 

The ANC’s position before coming to power was to cut defence spending, which had characterised the apartheid era, in favour of social services. Citizens of this country have had to suffer cuts in social spending as a result of a concocted explanation that the billions spent on the arms would help South Africa in peacekeeping missions on the continent. 

The arms deal has been mired in allegations of corruption which years later, have come to haunt the ANC with the truth nowhere in sight. The transformation project of the ANC – to build houses, water infrastructure, healthcare, and an education system – has suffered as a result. 

In recent times, your application in a court of law to seal contents of the CR17 bank statements which would identify the funders of your campaign to the high office, is testament that we cannot take your word when you call for transparency. The legal wrangle over the interpretation of the Executive Ethics Code aside, we know that donations to political parties, be it in internal or external campaigns can have a major impact on the outcome of the election and the direction of the party. 

Media reports stemming from the release of some of the bank statements showed hundreds of millions of rands from private companies that went into your campaign. What was the payoff? Some of these “donors” have found their way on your administration. What does it mean for the citizens of this country? Another Faustian moment? 

Government’s Economic Sabotage of SMMEs

It is not a secret or anything new that government departments and SOEs, through incompetent employees, pay suppliers three or four months late, and in some cases even a year after the service has been provided. There’s ample reading material to show how critical services including healthcare to citizens, have been compromised because government departments had not paid suppliers.

Year in and year-out the ANC stands on podiums to tell us about the importance of developing entrepreneurs and the various institutions which are meant to open economic opportunities for the small and medium enterprises. At one of your State of the Nations Addresses (SONA) you spoke passionately of the various instruments in place which are meant to unlock economic development and transform this sector.

Mr President, small businesses are dying because they are not being paid by government. When are you establishing a commission to investigate all the companies that government departments haven’t paid and hold those withholding payment accountable and charge them accordingly? If you can establish a commission into PPE fraud why don’t you do it for the many who for years have closed down businesses as a result of the corruption by your public servants?

While many businesses have had to beg for payment and in many cases close shop, those close to your office and the ANC leadership have been paid even before delivering the service. 

Departure from Mandate of the ANC

And so, Mr President, the ANC has long deviated from its mandate to deliver democracy through transforming society from colonialism and apartheid to radical socio-economic transformation. I have tried in summary to deal with some aspects of how the choices of the ANC to pander to capital have had a devastating effect on citizens – the Marikana massacre, another incident very close to you, being such an example. 

The ANC can no longer hold a position of moral high ground, integrity or trust. The betrayal of its citizens has been deep and I wish I could say it started two weeks before former President Nelson Mandela left prison and declared: “The nationalisation of the mines, banks, and monopoly industries is the policy of the ANC, and the change or modification of our views in this regard is inconceivable. Black economic empowerment is a goal we fully support and encourage, but in our situation state control of certain sectors of the economy is unavoidable.”

As history will attest, this was sheer rhetoric. 

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