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Tuesday, 11 July 2017

#Guptaleaks: South Africa Opens New Investigation into State Graft

  Elizabeth Sidiropoulos
#Guptaleaks: South Africa Opens New Investigation into State Graft photo © GCIS/Flickr

In June, South Africa’s public protector announced there would be a new investigation into the #GuptaLeaks allegations of corruption at the highest levels of government. It’s a symptom of South Africa’s broader problems.

South Africa’s own version of Wikileaks, the #GuptaLeaks, exploded into the public in late May. The information confirms in excruciating detail what the Public Protector Busisiwe Mkhwebane outlined in her report of October 2016: the South African state has been captured by the Gupta family, who have used their links to the president and other senior government officials to enrich themselves through the corrupt award of state contracts and benefits to their businesses. Their influence seems to have extended to cabinet appointments. In effect, a group of courageous journalists from Amabhungane and The Daily Maverick have exposed that much is rotten in the state of South Africa.

Yet following the public protector’s 2016 report, no formal investigations or criminal charges were laid by South Africa’s prosecutorial authorities. The #GuptaLeaks are emblematic of key features of South Africa’s third decade of democracy: the abuse of the criminal justice system for factional battles; a culture of ‘tenderpreneurs’, where the state becomes the dispenser of patronage at high cost to the treasury; the growing social disconnect between elites and ordinary citizens; and rising cries from members of the political elite that the constitution is responsible for the government’s shortcomings, since it constrains transformation policies.

The combination of these undermines the pillars of the rule of law, public accountability and fiscal rectitude. It has seriously damaged the social compact between the governors and the governed and created fertile ground for populism. Meanwhile, “radical economic transformation”—the new mantra of President Jacob Zuma—is supposed to lead to the Promised Land. To date, the content of the term is quite vacuous but has acted as a rallying cry for some, who see in it further opportunities for state plunder.

Click here to read our related article 'The impact of the cabinet reshuffle on South Africa’s standing as an emerging power'.

At the same time, the constitution, which has provided the framework for a polity that is governed by a bill of rights and provides a redistributive dimension, has been made the scapegoat. In all of this malaise, the courts (including the Constitutional Court) have become the moral voice, reminding government of the duty of accountability it has to its citizens. A political environment reliant upon dikastocracy (rule by judges) is not ideal in a democracy, but it seems to be the only avenue open for South Africa.

At the very centre of the web sits Zuma, whose second term as president of the African National Congress (ANC) ends in December 2017, although his term as president of South Africa runs until 2019. The ANC constitution does not prohibit him from standing for a third term as party president. Indeed Thabo Mbeki, Zuma’s predecessor, did attempt a third term but was soundly defeated by Jacob Zuma in 2007. Mbeki was ‘recalled’ by the ANC as president of the country in September 2008.

The ANC seemed invincible until the local government elections of August last year, but significant losses in major metropolitan areas, including the commercial capital, Johannesburg, and the administrative capital, Pretoria/Tshwane, revealed the chinks in its once indomitable armour. As the possibility of further electoral erosion has sunk into the governing party, and as ANC stalwarts have been repulsed by the extent of state capture by the Gupta family and the president’s circle, so too the calls for the president to step down have increased.

For the next several months, until the ANC elective conference, South Africa’s focus will be on the succession debate, as various factions within the ANC jockey for support. For Zuma, it is a do-or-die election. Securing the ANC presidency for his preferred candidate, the former chair of the African Union Commission and his former wife, Dr Nkosazana Dlamini-Zuma, is crucial for his own post-presidency future, with some 780 counts of corruption hanging over his head. The other candidate is the current deputy president, Cyril Ramaphosa, who was also one of the main architects of the country’s constitution in 1994-96. There is still some way to go before then, and it is too early to make any predictions.

Unfortunately, as these battles for succession play out, the focus of the political leadership is not on the affairs of state. South Africa’s economy technically slipped into recession this year with two consecutive quarters of negative growth. Formal unemployment reached 27.7 per cent in the first quarter of 2017, from 26.5 per cent in the previous period—the highest rate since the first quarter of 2004.

Once the rising star on the African continent and considered an important player in global affairs, South Africa has lost much of the lustre that it cultivated from the early 1990s. In March this year, Standard & Poor’s and Fitch downgraded South Africa’s foreign-denominated bonds to junk status. Earlier this month, Moody’s dropped the country’s grading to one notch above sub-investment. It cited weakening institutional strength as a key factor in its decision. The effects of the downgrade will be felt increasingly as the cost of raising funds on international markets becomes higher.

Zuma’s presidential term expires in 2019, but there is some speculation that he may vacate his position sometime after the ANC elective conference, provided he feels he has resolved his legal problems. However, South Africa cannot afford to have its economic and developmental challenges in a holding pattern while the ANC tries to extricate itself from internal factional rivalries. Whoever is South Africa’s next president will have to tackle persistent unemployment and inequality, regain international confidence and clean out the Augean stables of endemic corruption. Bringing back the lustre into the country’s domestic and international profile will depend not only on the integrity of that one person but also on ensuring that government institutions and the people who run them are accountable and responsible to South Africa’s citizens.

Elizabeth Sidiropoulos is chief executive of the South African Institute of International Affairs and editor-in-chief of the South African Journal of International Affairs. This article was first published with the Australian Institute of International Affairs.

Read our related opinion piece 'Is anyone listening? Of downgrades, hubris and redemption'