The growth of corruption opportunities: state capture, the Covid crisis and, the big one, the IMF loan

Corruption undermines the fabric of society. It impacts the poorest and most vulnerable in society disproportionately, it erodes trust in the country’s leadership and its political and economic systems, and it depletes the funds that should ensure public sector service delivery. The crucial effect that warrants being highlighted is that corruption serves to enrich those who have the power to create and leverage corruption opportunities.

Information exposed by the Zondo Commission and investigative journalists reveals that state capture provided a wealth of corruption opportunities. However, the lack of accountability for state capture emerged perfectly from the January 2020 exchange at the World Economic Forum in Davos between Bruce Whitfield and CNN's Richard Quest: Richard "How many people have gone to prison so far?” Bruce “I’ll get back to you on that point!”

Reflecting on this problem more broadly, Professor Patrick Lumumba, former Director of Kenya Anti-Corruption Commission, recognises that “in Africa, the shortest route to ill-gotten wealth is through political leadership”.

The public sector is, of course, not the only culprit. Private sector organisations are generally the other party to bribery and corruption. But the impact of public sector corruption is more impactful, far exceeding the private sector. Its procurement spend exceeds the private sector and the reach of its impact can negatively affect the whole population’s quality of life and all the businesses and institutions operating in the country.

Not surprisingly, South Africa continues to score poorly in Transparency International’s annual Corruption Perceptions Index (CPI) which ranks countries and regions by their perceived levels of public sector corruption. In the latest 2019 CPI, South Africa’s score remains in the lower, less ethical half of the scale with a score of 44 out of 100, where 100 represents a “very clean” public sector and 0 represent “highly corrupt”. It is no consolation that South Africa scores above the average for Sub-Saharan Africa (32/100) given that this is the lowest scoring region globally.

Then coronavirus delivered another corruption opportunity. Understandably, procurement measures were relaxed in response to the health crisis to expedite the delivery of necessary goods and services. The Covid response also included relief grants, extra-ordinary payments, such as those from the UIF, and food parcels.

That these opportunities have been utilised corruptly was acknowledged by President Cyril Ramaphosa in his address to the nation on 23 July. His commitment to crack down on Covid corruption included the announcement of coordinating centre to strengthen efforts between relevant law enforcement agencies. Crucially, the President also stated that the consequences for those found guilty would be "very, very severe". Much as this sounds good, it also prompts the question of what’s different this time? Let’s hope it is different and he will not have to get back to us on that point.

However, what is different about the latest corruption opportunity is its scale: On 27 July the IMF approved a R70 billion loan to South Africa. Relying on the President’s words and the integrity of the officials who will manage these funds as a corruption-avoidance strategy have proved in the past to be ineffective, to say the least.

Which raises the question of whether there is a solution. While the details of an answer can be complicated, there are two issues that are critical to start to address corruption: consequences and leadership.

Consequences for unethical and illegal conduct are not a perfect panacea, and consequences, sanctions or punishment will not eliminate misconduct. But it is an essential tool as a deterrent. The absence of consequences has seen accountability fall by the wayside and tipped the balance of a cost-benefit analysis in favour of misconduct.

The rider is that consequences are only effective when they are consistently enforced against all who are guilty of misconduct. This, in turn, necessitates the effectiveness of the whole consequence management process. Reporting misconduct must be free from victimisation, the investigative process must be thorough, and the legal or disciplinary process must be fair, impartial and in line with the law.

The erosion of these processes presents a significant stumbling block. But focusing on high profile cases and ensuring that senior officials are held to account – and, when necessary, actually go to jail – will go a long way to strengthening this corruption tool.

Adding to this, the key non-negotiable factor to address corruption is ethical leadership. The power and authority vested in high profile political leaders make them an especially effective influence. But this influence can be positive or negative, to demonstrate what is acceptable and desirable or what is not. In the latter case, the impact of unethical leaders as role models is very damaging. It creates a culture that condones misconduct, illegal behaviour and the prioritisation of improper personal gain, and drives lowest common denominator behaviour.

To reap the benefits of ethical leadership it is important to recognise that ethical leadership does not simply entail the absence of engaging in or facilitating unethical or illegal activities. Ethical leadership implies that the leader stands up visibly and vocally for what is ethical every time and all the time, and that political decisions are made for the benefit of the people, not for self-enrichment.

And we should remember that we have had the benefit of such ethical leaders. Andrew Mlangeni was such a leader. The political activist and anti-apartheid campaigner imprisoned after the Rivonia Trial who died this year on 21 July was described as a man “who was unwavering when it came to integrity, morals and ethics” and who leaves “a footprint of courage, integrity and service to the people of South Africa”.

A positive approach to leveraging these factors could entrain the phrase, ‘where there's a will there's a way’. Applied in the current circumstances, determination to overcome the many obstacle is unlikely to be sufficient. Instead, what is essential is political will, aligned action and a serious dose of courage to give effect to ethical leadership and to enforce consequences.

by Cynthia Schoeman
© Ethics Monitoring & Management Services (Pty) Ltd, 2020