South Africa

AFRICA CHECK

Jury still out on DA claim that South Africa loses R800-million to corruption daily

The figure can’t be verified, and appears based on an older rumour — itself unsubstantiated — that R300-billion is lost every year.

“Over R800-million per day is lost to corruption, nationally,” claims a June 2022 tweet posted by South Africa’s Democratic Alliance (DA) opposition party.

The claim was made as part of the party’s campaign to fight “cadre deployment” by the ruling African National Congress (ANC) government. Cadre deployment is a policy of appointing party members to government positions based on their loyalty to the party’s aims and objectives. 

The DA’s #OutlawCadreDeployment campaign includes a proposed law to ensure public service appointments are based on merit instead of party loyalty, and court action to declare cadre deployment unconstitutional. 

The party has connected the policy to “State Capture”, a form of corruption in which politicians and businesses work together to make economic and political decisions that advance their interests. 

In late 2021, a commission of inquiry into alleged State Capture by former president Jacob Zuma and businesspeople Ajay, Atul and Rajesh Gupta, known as the Gupta brothers, wrapped up.  

State Capture cost South Africa billions of rands in tax funds. But is R800-million lost to corruption each day? We checked. 

Source for DA’s figure unknown

Africa Check asked the DA for the source of the figure and how it was calculated. At the time of publication, the party had not responded. (Note: We will update this report if they do respond.)  

We were also unable to find the source of the claim online. Our searches brought up several articles about corruption in South Africa, all giving different figures

Jannie Roussouw is a professor of business administration at the Wits Business School. He told Africa Check that he had heard that R300-billion was lost to corruption each year, but could not verify it. 

“I don’t know where the figure of R300-billion comes from in the first instance but it seems to me that they worked from an annual figure to a daily figure,” he said. 

R800-million a day comes to R292-billion a year — almost R300 billion. 

We were also unable to find a source for the supposed R300-billion lost yearly. We contacted Corruption Watch, an anti-corruption nonprofit based in Johannesburg, for clues. They were also unable to verify the DA’s figure or provide us with a more accurate estimate. 

“This is a question that has been posed to us for the entire 10 years of our existence, and is a question that no one organisation can answer satisfactorily, not even in government,” Moira Campbell, Corruption Watch’s communications head, told Africa Check

“The absence of a monitoring mechanism for state institutions makes it hard to come up with a figure of how much is lost to corruption, let alone per day, and those institutions that investigate or audit government spending also can’t quantify how much is lost because procurement and reporting rules are simply not followed,” she said.

Government estimated R27-billion lost to corruption per year

In 2017 local news organisations quoted then minister of economic development (and current trade and industry minister) Ebrahim Patel as saying corruption cost South Africa at least R27-billion a year. This works out to roughly R74-million a day. 

Patel repeated this claim in parliament in July 2019. 

Africa Check asked Patel’s office how the figure was calculated and whether there was a more recent estimate. We have not received a response but will update this report if we do.

‘We simply don’t know’ — experts

This is not the first time Africa Check has looked into claims about how much money is lost to corruption in South Africa.

In 2015 we investigated a claim that R700-billion had been lost to corruption since 1994, the year of the first democratic elections. We found the figure to be a thumb-suck, calculated using numbers that did not appear in any credible research and a complicated game of broken telephone. 

The head of governance, crime and justice at the Institute for Security Studies, Gareth Newham, previously told Africa Check “we simply don’t know what the actual amount is because corruption is a crime in which both parties benefit and will seek to hide”.

This was confirmed to still be the case by Corruption Watch’s Campbell.

“The agencies of government that could help come up with a figure are so fragmented and disjointed, and one might add, poorly monitored,” she told Africa Check

“It was recorded by the office of the chief procurement officer in 2018 that government spends in the region of R800-billion per annum on the procurement of goods and services, but it remains a question as to how much of that reaches its intended objectives.” 

Assuming that the DA’s figure is correct, it would mean R800-million (or 36%) of the R2.2-billion the government spends every day is lost to corruption. 

But there is no recent publicly available data to support the figure. And without a clear idea of how Patel’s number was calculated, it is difficult to determine exactly how much is lost to corruption every day.

Conclusion: DA’s claim that R800-million per day lost to corruption is unproven

South Africa’s opposition Democratic Alliance recently claimed that R800-million was lost to corruption every day. The statement was part of their campaign to end “cadre deployment”. 

The party did not respond to requests for the source of their number.  The closest matching figure we were able to find is that R300-billion is lost to corruption every year,  which an expert had heard of but was not able to verify himself.

Experts told Africa Check that the hidden nature of corruption and the dysfunction in reporting mechanisms made it difficult for anyone to know how much money was lost to corruption. 

Therefore, we rate the claim as unproven. DM

First published by Africa Check.

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Comments - Please in order to comment.

  • Chris 123 says:

    Assume what we know is the tip of the iceberg and the cadres are looting as fast as possible in case the taps get turned off. The yes I’m sure the DA is right.

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