One does not have to look further than the countries included in the bottom half of Transparency International’s annual Corruption Perception Index to realise that the majority are located on the African continent. In South Africa corruption is most visible in the public sector, where the Auditor General (the regulatory body responsible for government auditing) estimates that at least six out of 10 public servants hold private business interests, almost 60% of national Members of Parliament own shares in companies and 45% hold directorships in private companies.
The biggest concern is that public officials, who have the authority to mandate and approve public tenders, use their influence to award government contracts to themselves or entities in which they may have a vested interest. This has led to the coining of a new term in South Africa - the “Tenderpreneur”. This generally refers to an individual who benefits from government contracts, either through personal connections or relationships with government officials, or a government official who holds both government and business interests simultaneously.
Corruption has such a pervasive and corrosive impact on society as a whole that it leaves no one untouched. In South Africa, corruption not only destroys the credibility of business in general, but has also had a considerable impact on the daily livelihood of every citizen, depriving them of the basic services such as water, sanitation and housing. This lack of service delivery has resulted in frustration and resentment within poorer communities, culminating in protest marches to local government offices and violent clashes between protestors and police.
South Africa’s anti-corruption framework incorporates a combination of legislative, investigative, prosecutorial and other government anti-corruption initiatives and working groups. The country’s primary anti-corruption legislation has been effective since 2004, but is perceived to be ambiguous and to impede, rather than facilitate, the proof and prosecution of corruption. The Act appears to have created a gap between what constitutes illegal conduct and what is regarded as unethical conduct.
The South African government has, in recent years, stepped up its anti-corruption initiatives, which include a national anti-corruption programme aiming to provide leadership against corruption, promote ethical practices, implement anti-corruption frameworks, and provide platforms for all sectors to engage on issues of corruption. The government is also proposing a new Bill aimed at limiting political influence over the tender process at a local government level.
In spite of the various anti-corruption initiatives currently in place, fighting corruption in South Africa remains one of the government’s biggest challenges. South Africa is currently seen as the gateway to the rest of Africa. Although countries such as China and India have already invested quite extensively in various African countries, other emerging economies are also looking to expand their footprint on the African continent. As a result, South Africa has recently become an official member of the Brazil, Russia, India, China (BRIC) group of large emerging economies.
Following the downturn in the global economy, companies in the US and Europe have also started looking at Africa as the next frontier for higher return investments. One of the biggest challenges for companies operating in Africa is striking the balance between acceptable conduct in terms of the local business environment and ensuring compliance with international anti-corruption legislation such as the United States Foreign Corrupt Practices Act (FCPA) and the new United Kingdom Bribery Act (UK Bribery Act). With various South African companies currently operating in foreign countries and being listed on foreign stock exchanges, they also need to consider the impact of and ensure compliance with all applicable Anti-Bribery and Corruption (ABC) legislation.
Tackling corruption in South Africa, especially in the public sector, requires a fully independent judiciary backed by the political will to fight it. Some civil organisations in South Africa are calling for an all new anti-corruption commission led by an independent judge with no political interference. This would allow investigators to perform their duties without the fear of ’upsetting someone‘ in a key position. The political will to fight corruption needs to be evidenced by effective prosecution and sanctioning Irrespective of the accused person’s position, standing or political affiliations.
