The Judicial Commission of Inquiry into Allegations of State Capture or the Zondo Commission, headed by Deputy Chief Justice Raymond Zondo, has been notified about the overwhelming scale of corruption and fraud involving public bodies under the presidency of Jacob Zuma (2009-2018) in South Africa. The Commission’s findings have badly damaged the reputation of the African National Congress (ANC) and South African institutions. The revelations of this ongoing inquiry highlight a pressing issue for Cyril Ramaphosa, Zuma’s successor as president: Ramaphosa must restore confidence in South African politics in order to restore the position of both his own party and South Africa’s international standing.
The Zondo Commission has confirmed the existence of rampant corruption occurring at the highest levels of office during Jacob Zuma’s presidency in South Africa. The inquiry, whose mandate expires on 31st March 2021, has found compelling evidence for a situation of ‘state capture’, a type of systemic political corruption in which private interests influence a state’s decision-making processes to their own advantage. These findings have left President Ramaphosa with the task of restoring trust in South African institutions.
State of Corruption
The Zondo Commission was established to investigate allegations of corruption, fraud and state capture under President Zuma. The Commission’s main lines of inquiry revolved around Zuma’s relationship with members of the Gupta family, a group of Indian-born private businessmen who have long been accused of having an inappropriate influence on state decision-making, as well as Zuma’s misappropriation of state funds and his use of the State Security Agency (SSA) to shield himself from reprisal.
The Gupta family first came to public attention in 2013 when it emerged that they had been allowed to use a military base near Pretoria, usually exclusively reserved for diplomats and heads of state, as part of a wedding celebration. The Commission heard how the Guptas, on several occasions, allegedly offered promotions to public officials in return for political decisions being made in favour of their business interests. The Gupta family were allegedly able to control the appointment and removal of key ministers and direct lucrative contracts towards their own businesses. Indeed, the extent of the family’s influence on South African politics was so pervasive, it amounted to ‘state capture’.
The Commission also discovered that millions of public funds were directly misappropriated by former President Zuma. His private Nkandla residence was upgraded in 2009, allegedly for security reasons, but it was discovered that large amounts of unaccounted-for money had been spent on recreational features, such as a new swimming pool and animal enclosures. Millions of South African Rands were embezzled through illicit payments to himself and the Gupta family.
The Commission also received testimonies from multiple members of the SSA, all of whom alleged that Zuma used the intelligence service as a personal protective force. Under these allegations, the SSA attempted to disrupt negative press attention in the media and recruit members of the judiciary for favourable court outcomes for President Zuma.
What are the consequences for Ramaphosa?
With the extent of corruption of the previous administration being revealed, confidence in South African institutions has waned both internationally and domestically. The ANC’s reputation is extremely tarnished, and a huge amount of money has been lost from the South African economy. President Ramaphosa now has the task of reforming South African institutions to restore the credibility of both the ANC domestically and South Africa internationally.
The damage done to perceptions of South African institutions, both at home and abroad, has ramifications for economic growth and stability. According to Transparency International’s corruption index, South Africa stagnates at a lowly 69th out of 168 countries. An international perception of corruption damages the country’s ability to attract foreign investment or to secure IMF loans. The perception of corruption has also led to domestic unrest and extremely low growth, as eroded trust in government has resulted in issues with tax morality.
Deep reputational damage has been done to the country’s dominant political party, the ANC. There is little evidence that the ANC are taking the necessary steps to tackle corruption, with the former chairperson of parliament’s standing committee on public accounts describing the ANC as only paying lip service to anti-corruption. President Ramaphosa will have to address this weakened reputation in order to manage potential threats from any rival parties that emerge with genuine anti-corruption credentials.
Moreover, large amounts of money have been lost from public coffers. President Ramaphosa announced that the amount lost to the State was more than R500bn, whilst Standard Bank chief economist Goolam Ballim has estimated that the costs from poor political leadership total as much as one trillion rands. South Africa’s economy is already suffering greatly under the strain of the global pandemic, and the loss of such large amounts of public money decreases the state’s ability to invest in infrastructure and subsidies for affected sectors.
Which actions are required?
Firstly, Ramaphosa must demonstrate the political will to address corruption within the ANC. A party demonstrating strong anti-corruption credentials could emerge as a major threat to ANC hegemony at the next parliamentary election. Ramaphosa should expel all officials involved in Zuma’s corruption from the executive. This top-down reform should be supported by implementation of the recommendations that the Zondo Commission eventually makes.
Secondly, the SSA must be reformed or even disbanded. The security agency has been growing as a threat to democracy since before Zuma took power: Ramaphosa must impose top-down reform on what is evidently an institutionally corrupt public body. Collating all five intelligence agencies into one leaves that agency too powerful and open to the kind of abuses of power that saw their transformation into a personal protective force for the former president. The SSA should be disbanded and the previous system of different intelligence and security agencies reinstituted.
Additionally, public finances require greater independent oversight. Poor governance of state-owned entities (SOEs) has resulted in an inability to borrow to meet financial obligations, placing government finances further at risk. The institution of a new oversight body, one independent from the office of the presidency, with a mandate to assess SOE spending and investment would act as a safeguard against mismanagement and corruption.
These are critical actions for reinstating the South African government’s domestic and international credibility as the most developed nation in sub-Saharan Africa, especially under the strain of the economic fallout from the global pandemic. Restoring its international credibility will allow the country to rediscover its role as a regional leader on economic development and good governance.
