Defend Truth


Economic growth is simply not possible in the midst of serious corruption


Paul Hoffman SC is a director of Accountability Now.

Without the necessary confidence to invest, the growth strategy will remain a pipe dream; local and foreign investors will simply continue to hold back for fear of losing any new investment to the ravages of corruption and organised crime in SA.

The Institute for Race Relations has unveiled its blueprint for growth. It describes the laudable goals for the blueprint as follows:

“Most South Africans are not happy with the way the country is going. Unemployment, inequality and poverty have been on the rise for over a decade. Infrastructure is collapsing, investors are pulling out and the cost of living is rising. What can be done to fix this and make South Africa the prosperous country it can be?

“Economic growth is the answer. Higher growth will allow South Africa to escape the vicious cycle in which we are currently stuck. It will also restore hope of a brighter future, build prosperity, revive business and consumer confidence and give the country the new start it so badly needs. The IRR’s latest report, written by our CEO Dr John Endres and titled The IRR’s Blueprint for Growth: Arming SA’s Pro-growth Forces, lays the groundwork for the new Blueprint for Growth series which will show how South Africa can achieve economic growth.”

Hermann Pretorius, head of strategic communications at the IRR explains that:

“South Africans face a fundamental choice: poverty or growth. Ultimately, that’s what this year’s elections boil down to. The pro-poverty forces in our country have over many years eroded the opportunities of South Africans to freely participate in a value-add economy where wealth is created across all parts of the country. Instead, a wealth-destroying ideology has trapped millions in poverty, whilst deliberately empowering pro-poverty cronies, cadres, crooks, and comrades to pillage and plunder.

“The only way out of this pro-poverty socioeconomic death spiral is a change of policy – it’s time to arm the pro-growth forces in South Africa with the data, arguments, policies and opportunities to make South Africa the growing beacon of opportunity it can be.”

While it is correct that the way in which the national government has operated for many years has the effect of increasing poverty, unemployment and inequality, these increases are more due to the rampant serious corruption and organised crime abroad in SA that exacerbate the incidence of poverty, unemployment and inequality than to any “pro-poverty” agenda.

Drilling down into the report, it appears that the IRR has correctly noted the lack of business confidence which is necessary for growth. It observes that “key indicators of business, investor and consumer confidence are at record lows with increased capital outflows and a scarcity of new direct investment. Debt levels have surged, with government gross loan debt increasing from 23.6% of GDP in 2008/09 to 70.9% of GDP in 2022/23.”

Without the necessary confidence to invest, the growth strategy will remain a pipe dream; local and foreign investors will simply continue to hold back for fear of losing any new investment to the ravages of corruption and organised crime in SA. They will need dramatic evidence of fundamental change before they invest the funds necessary to fuel the growth that the IRR strategy desires.

Threat to South Africa’s well-being

The IRR is apparently vaguely aware of the need for reform to address the high incidence of corruption in all its various forms, but has not given sufficient attention to the threat it poses to the future wellbeing of the country. Toward the end of its report, it mentions that:

“Stamping out corruption requires changes to EE and BEE rules, plus effective investigation and prosecution in place of costly commissions of inquiry. Police and prosecutorial efficiency should also be enhanced by seconding private sector managers to national and provincial police headquarters, the Hawks, the Independent Police Investigative Directorate (Ipid) and the National Prosecuting Authority.

“All future appointments and promotions in both the police and prosecution services should be based on merit (as broadly defined) and supplemented by suitable entrance and advancement examinations. Current police officers should be retrained and held accountable for their performance. Specialist units should be restored to help combat murder, robbery, fraud, the drug trade, illegal mining, the vandalism and theft of vital infrastructure and other types of organised crime. The independence and capacity of the Hawks must be enhanced and effective public order policing restored.”

The ANC has other plans. It wants to remove the investigation of serious corruption from the Hawks, presumably because they lack the operational and structural attributes that the Constitutional Court has prescribed in binding terms for SA in the Glenister litigation.

In place of the Hawks will come an Investigating Directorate Against Corruption located within the National Prosecuting Authority. The National Anti-corruption Advisory Council (Nacac) is scheduled to report on the reform of the capacity of the country to counter corruption before the end of February 2024. Its input will be instructive.

The members of the “moonshot pact”, which includes the DA and IFP, the second- and fourth-biggest parties in the current Parliament, favour the establishment of a new Chapter Nine entity to prevent, combat, investigate and prosecute serious corruption. The EFF also favours the Chapter Nine route but in a different way; it wishes to convert the NPA into a Chapter Nine body in order to end executive interference in anti-corruption work.

None of the parties favours the solutions suggested by the IRR, with good reason. The Hawks will not be able – while they remain part of the police – to acquit themselves efficiently and effectively as the slayers of the seriously corrupt. Without a successful investigation, a successful prosecution cannot follow.

The NPA has been gutted by State Capture. The institution is infested with what its own leadership call “saboteurs” who see to it that impunity is still in place for the well-connected who are involved in kleptocracy, State Capture and tenderpreneurism in all its various forms.

The binding Glenister decisions of the Constitutional Court require of the government that it establish a single specialised body with trained operatives who enjoy independence, guaranteed resources and secure tenure of office. These characteristics of effective and efficient corruption busters have become known as the STIRS criteria. They are not in place and have not been at any time since the court so ruled.

On the watch of Jacob Zuma this was understandable. After all, closing down the Scorpions was rapidly achieved in order to enable the State Capture project that flourished during his two terms in the presidency. The IRR’s suggestions for reform are not constitutionally compliant.

In recent correspondence with the presidency, the following issues have been raised by Accountability Now:

“The reference by the president to the independence of the existing and planned anti-corruption machinery in his Sona reply yesterday requires scrutiny because, inter alia:

  1. The NPA is firmly under the final responsibility of the minister of justice who must concur in all prosecution policies; his DG is the accounting officer of the NPA, and it is operated as a programme within the ministry of justice [C 179 refers];
  2. Control of the police service is dealt with in C 207, which envisages executive control via the president, his appointee the national commissioner of police and his minister of police;
  3. The SIU and FIC are not part of the criminal justice system. The SIU can only operate when directed to do so by a presidential proclamation and the collection of financial intelligence does not directly result in the incarceration of the corrupt or in the recovery of their loot. An independent entity is legally required for this important work; and
  4. The IDAC Bill currently before Parliament does not properly address the need for compliance with the independence requirement as spelt out in Article 6 of UNCAC and in the Glenister litigation.

“In short, none of the existing or planned entities, the ID, IDAC and the Hawks in particular, are independent due to the operational and structural constraints listed in the four numbered points above.

“Former Chief Justice Mogoeng Mogoeng spurned the multi-agency approach in his majority judgment in Glenister Three. He held: ‘We are in one accord that SA needs an agency dedicated to the containment and eventual eradication of the scourge of corruption. We also agree that that entity must enjoy adequate structural and operational independence to deliver effectively and efficiently on its core mandate.’

“None of the post-Zuma era reforms properly address the issues I have raised in this correspondence; SA remains bereft of an entity able to counter corruption. What is clear from the reports of the Zondo and other recent commissions of inquiry is that serious corruption in all its manifestations continues in SA due to the inability of existing (and planned) structures to deliver effectively and efficiently. Hence the success of State Capture. The executive persists in the multi-agency approach despite being bound by the findings of the courts.”

The presidency, and indeed Nacac too, have yet to answer the central question raised by Accountability Now in the said correspondence. If an answer is forthcoming it will be added to this intervention.

The question is: Mr President, when is your government going to take seriously its treaty obligations under Article 6(2) of the UN Convention Against Corruption, and also its duties in terms of the binding joint judgment against it in the Glenister litigation, by establishing the independent entity they both require for countering corruption in SA effectively and efficiently?

Eye on the ball

The IRR would do well to keep its eye on the ball as regards anti-corruption reform of the kind supported by the opposition parties in Parliament, study the Nacac report when it is made public, and revise its growth strategy so that the good ideas in it are not stillborn due to its failure to address the scourge of serious corruption in a constitutionally compliant manner that both respects the treaty obligations referred to above and recognises the binding nature of the majority judgments in the Glenister litigation.

The prosperity that comes from sustainable economic growth of the kind championed by the IRR will be welcome to the poor and the unemployed. It can only follow criminal justice reform that has due regard for solemn international obligations and the binding legal precedents laid down in the Glenister litigation.

The culture of entitlement that allows serious corruption with impunity to flourish under the mantra “it’s our turn to eat” must and will end when the necessary reform is in place. The Nacac has an awesome responsibility, as do the voters of SA as they go to the polls on 29 May 2024. DM


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