President Cyril Ramaphosa faced pushback against his mooted ban on civil servants and cadres doing business with the state. At the party’s August special ANC NEC anti-corruption meeting, he said the party should step aside and allow non-aligned businesses to benefit from the government’s contracts with the private sector, but the party’s reform wing caught flak at this weekend’s NEC meeting.
The government spends an average R500-billion a year (more in the 2020 Covid-19 economy) and the tenders which govern this spending have created an economy around itself.
Outlining an eight-part economic reconstruction and recovery plan, Ramaphosa said that the ban on civil servants doing business with the state would be enforced but he also said that the party would consult on what the policy should be for politically exposed persons (PEPs) who were no longer in office. He said their “human rights” (to be in business) were a consideration and that the consultation should define the “most appropriate means of politically exposed persons engaging in business with the state”.
The term ‘PEPs’ comes from financial intelligence legislation which red-flags the accounts of politically exposed and influential persons because their access to public funding streams is a corruption risk. The Public Service Commission has failed for over a decade to secure the implementation of laws which forbid civil servants doing business with the state and the Auditor-General has found that across the three levels of government, the practice is common.
“The ANC commits to an approach that balances the need for the detection of the movement of bribes, the use of the financial systems to launder illicit money flows and the human rights need to allow for honest living (including engaging in business), where a citizen has ceased to be entrusted with a prominent public function… further consultations… will be held among alliance partners and in the legislatures across the political spectrum to find the most appropriate approach to the issue of other politically exposed persons conducting business with the state,” read the party statement.
At the weekend NEC meeting, Ramaphosa got the thumbs-up for an eight-part recovery plan being inked at Nedlac and which is focused on energy and food security, agricultural production and the empowerment of black farmers, infrastructure, tourism, the green economy (largely renewables and recyclables), urgent spectrum auction and a public employment programme (the government’s public works programme already provides 500,000 jobs and will now be extended).
The ANC also said “macroeconomic interventions must be the bedrock of (all) interventions” and that “it will be an imperative for sustained reconstruction and recovery that SA brings its national debt under control and stabilises public finances”.
Ramaphosa billed the package as a “radical economic transformation” (RET) programme, but the terminology appears to be a sop to the faction led by the party’s secretary-general, Ace Magashule. The term usually refers to party resolutions to nationalise the SA Reserve Bank (to buy out minority shareholders) and for a programme of prescribed asset legislation where the government can, through legislation, instruct pension funds on asset allocations.
None of these items was highlighted in Ramaphosa’s statement, which said, “We will be fostering RET to enable black-led companies and women-led companies to be key players” with a special focus on youth-led companies. Ramaphosa pledged “pro-growth reforms” in the energy, telecommunications, mining, agriculture and tourism sectors.
Business for South Africa has taken the gloves off and become much more voluble about stalled reforms and this pledge is a market signal for reform. So is the mantra Ramaphosa ended his report on. “Implementation, implementation, implementation – that will now be the order of things,” he said.
He said the recovery and reconstruction plan would revolve around the principles of black empowerment (especially in farming and spectrum auction) as well as in “gender mainstreaming” to bring more women business owners into the mainstream. DM