Ramaphosa's efforts will fail unless corrupt officials are brought to book

South African President, Cyril Ramaphosa, has a tough job of convincing investors that the country has turned the corner. GCIS

South Africa’s new President, Cyril Ramaphosa, has been showered with praise for his early moves of fighting corruption. But he will need to do much more to win back investor confidence.

Critically, Ramaphosa needs to display that wrong doers of former President Jacob Zuma’s era are going to be held accountable through prosecution. Numerous academic studies, including mine, show that investors consider the effective execution of law and order as an indicator of property rights protection.

For South Africa, this means that stabilising government debt and attracting much needed investment will entail both the investigation of corruption as well as prosecution of those implicated. Achieving this will prove impossible if investors aren’t convinced that the rule of law is alive and well.
Ramaphosa has started well. He devoted a great deal of his early days to removing compromised and corrupt elements in key leadership positions, including government departments, state owned enterprises and in security and justice agencies.

He followed up by setting up outwardly focused initiatives to attract investment. These include the establishment of special envoys to attract $100 billion of investment into the country.

These measures will go some way to fixing the wrongs of the past but they are far from sufficient. It’s not enough for politicians who oversaw and actively contributed to the decimation of the country’s social and economic fabric to simply retire from politics, move to new positions in the African National Congress (ANC), or be moved to other state departments. Similarly, reversing Zuma’s legacy of state capture won’t be possible unless the officials appointed by his ministers are also investigated and prosecuted.

Significant damage

The economic damage caused during the Zuma years is huge. The latest economic growth numbers are not encouraging. Gross domestic product shrank by 2.2% during the first quarter of this year and is expected to remain muted for the rest of the year.

The latest reviews from global rating agencies are also unflattering. For example S&P has noted that South Africa’s fiscal and economic trajectories are still very weak. As a result, the country is vulnerable to investor sentiment. This is being reflected in the weakness of the country’s currency as investors dump domestic equities and bonds.

The damage is especially prevalent in public institutions. The extent of the damage is reflected in the latest report of the auditor-general, Kimi Makwethu. Irregular expenditure, which includes payments made for contracts awarded unlawfully or without necessary approvals, rose by 75% compared with the previous financial year. Fruitless and wasteful expenditure, which are payments made in vain, increased by 71%.

The Auditor General notes that municipal corruption had been steadily increasing for over a decade but that the problem had rapidly worsened over the past five years. The key reason for the deterioration in state finances was that corrupt officials increasingly believed that they were immune to prosecution. That does not bode well for investor confidence.

Does the state have the means?

A troubling problem is that the country might not have the ability to effectively deal with the litany of ills bequeathed by Zuma. The country has limited resources available for a prosecution process that is going to be long and laborious.

The prosecuting capability of the state was in the spotlight recently when a court ruled against the state’s Asset Forfeiture Unit in a case against the Gupta family. The judgement shows that the country’s prosecuting institutions have been systematically compromised.

And although a commission of inquiry into state capture has been set up under Judge Raymond Zondo, it’s unlikely to wrap up its work in under two years.

This suggests that, despite the optimism, realistically South Africa may not have the institutional capacity to fight systemic corruption and prosecute those involved at a pace sufficient to convince domestic and foreign investors that their investments are safe from ongoing corruption.

Accountability

While there are many leaders with large public profiles that need to be investigated thoroughly for corruption, it isn’t enough to fixate on the “top of the pyramid” only.

Massive corruption needs many enablers, in both the private and public sector, to either actively participate in the wrongdoings or, at the very least, look the other way. This means that although a few high profile arrests and convictions can be useful signals to investors that concrete steps are being taken to reclaim the state, a much more robust process is needed to shore up the economy and South Africa’s crucial institutions.

This raises an essential question: how much pain is the country prepared to endure in the short term to fully excise the rot of corruption, creating more sustainable prospects for the country?

Recent experiences from Brazil show that inquiries into state corruption can profoundly complicate economic recovery. That’s more so if the slow pace of the court processes mean that politicians, officials and directors are not held to account expeditiously.

Ramaphosa has done well in turning the ship of state over the last 100 days, but eradicating and rectifying the legacy of state capture will need immense political will and institutional capability. Without visible accountability, corruption will just decentralise into the shadows and South Africa will once again be in peril.
Sean Gossel, Senior Lecturer, UCT Graduate School of Business, University of Cape Town and Timothy London, Senior Lecturer, University of Cape Town
This article was originally published on The Conversation.

ANC won't fix internal strife unless it addresses root causes of discontent

ANC members show their support for party leader and president of South Africa, Cyril Ramaphosa. Brenton Geech/EPA-EFE

South Africa’s governing party, the African National Congress (ANC), is in crisis less than a year before a general election expected to be held in mid-2019. If it wants to end the crisis, it may have to do something about which it talks a great deal, but does little – trust its members.

The ANC has been in crisis for years, as its own documents confirm. Its regional and provincial leadership elections are almost routinely challenged as losers claim the winners broke the rules. Often the challenges centre on claims that the process in which branches send delegates to conferences was flawed.

It was this crisis which ensured that the ANC could choose leaders last December only because the contesting factions made a deal to share positions. Without that bargain, the losers would have cried foul. There was no guarantee that the conference would continue – and every certainty that, if it did, the outcome would be tested in court.

The deal kept the ANC afloat, but did nothing to ensure that anyone in the governing party trusts its processes or that there’s a structure in the ANC with enough credibility to settle disputes and convince the losers, or those who fear they will lose, that the processes are fair.

This crisis could grow as the ANC chooses candidates for its 2019 election lists. Much is at stake. Who is chosen will decide which faction dominates in national and provincial parliaments. And, because economic opportunities in the market are limited, winning a place on the list which gets you a seat can, for many, be a ticket into the middle class.

So a heated contest seems certain and the ANC’s current performance makes it likely that losers will claim they were done down. Since voting trends (in local by-elections which give a sense of who voters are supporting) suggest that the ANC will win next year’s election comfortably, the battle to choose candidates may be far more damaging to it than the election.

Millions excluded

Part of the reason for the crisis is the ANC’s failure to tackle the exclusion of millions from the mainstream economy. Because it has not engaged key economic interests in negotiations on opening up the economy, politics for many of its members is not about public service or status but about looking for resources.

Even if it plans to address this urgently – and there is no sign it does – the problem will take years to fix. So its elections will remain, at least in part, a battle to make it in the economy and there will be huge incentives to break the rules. This means that it will remain in crisis unless it looks at its own organisational problems.

It has recognised these problems – it excels at identifying its woes and discussing them openly. But, although it has debated remedies and set up teams to deal with them, its willingness to say what is wrong is not matched by an ability to put it right.

This is because the problems are deep rooted. But it is also because the ANC has done little or nothing to fix the structures where the problem starts – its branches. The more than 3 000 branches are the core element of ANC decision-making. They nominate candidates for office and choose most of the delegates at conferences who vote for leaders. They are also meant to be the units in which ANC members discuss policy. But ANC documents and other sources report constant claims that branches are constituted, or operate, in ways which are irregular.

Broken branches

The ANC routinely insists that the branches are all-important. And it does try sometimes to put out fires at branch level. But it has never begun a concerted effort to ensure that the branches really are where power lies and where members can express themselves openly.

ANC leaders would hotly deny this. It is an article of faith within the organisation that the leaders are simply servants of the members in the branches. But many branch members complain about being ignored, bullied into supporting factions or generally being treated like useful weapons in the battles between elites.

Making sure branches wield real power and allow members a say is difficult –because so many are excluded from the economy, some do join branches in the hope of attaching themselves to politicians who will steer resources their way. But it is not impossible. Many members belong to branches because they care about the ANC and the country. Many are unhappy with vote-buying and corruption and would fight it if they were taken seriously.

It is also essential. The only way to fix the ANC is to make sure that the branches have power to fend off those who would buy or bully them and to hold to account leaders who look after themselves, not citizens.

Holding leaders to account

Perhaps the most common refrain in this country is that we need “leadership”. But leaders do what the people want only if the people are strong enough to make sure they do. That is as true for the ANC as for the country.

If it wants elections that are about who has most support, not who is better at rigging branches and pushing them around, it has no option but to make sure that its branches really do call the shots.
Steven Friedman, Professor of Political Studies, University of Johannesburg
This article was originally published on The Conversation.

To fix South Africa's dysfunctional state, ditch its colonial heritage

South Africa’s Union Buildings in Pretoria.
Paul Saad/Flickr, CC BY-NC-ND

South African President Cyril Ramaphosa recently made an astonishing statement: that the country’s governance is collapsing. It takes extraordinary courage for a head of state and of the national executive to be so candid.

Ramaphosa’s statement followed the release of damning data about the state of governance in the country. For example, the most recent report from the Auditor General Kimi Makwetu showed that only 7% of the country’s municipalities are discharging their constitutional mandate. And only 8% were given a clean audit in the last financial year.

Hot on the heels of this report were parliamentary briefings which painted a gloomy picture of the state of public service. Added to this is the fact that a number of state owned enterprises have gained notoriety as conduits for patronage.

Does this suggest that South Africa is at the tipping point? I’m asking the question because an important determinant of a functioning state is its administration. As the British political scientist Andrew Heywood argues:

Political systems can operate without constitutions, assemblies, judiciaries, and even parties, but cannot survive without an executive branch to formulate government policy and ensure that it is implemented.

The administration of the state is key. A political system can be optimised or vitiated by the way in which public affairs are managed. Politics decides a system of government while the administration of the state institutionalises how these objectives are realised. In a democracy this is about enhancing the quality of citizens’ life.

To understand what’s behind the appalling state of governance in South Africa it’s more useful to look at causes, rather than just the problems. I argue the main driver is that South Africa’s democracy has been sacrificed at the altar of neo-liberalism - a system of organising society in which the markets are left unbridled and their principles thrust into various aspects of human life.

The rise of neoliberalism

The collapse of communism in Eastern Europe in the 1980s gave the neo-liberalism arsenal an unfettered edge. It was peddled as the panacea by international financial institutions and liberal scholars. Audaciously, an American political scientist and economist Francis Fukuyama proclaimed in his book The End of History and the Last Man that the market economy and a democratic political system were the only means to achieve sustained growth and development.

The post-apartheid state was created just as these views were becoming more prevalent. This meant that the new state didn’t deconstruct the colonial architecture of its administration.

The African National Congress (ANC) also took over running the state with zero experience behind it.

In other words, the ANC ran into government in 1994 completely unprepared. As a result, it often embraced the colonial apartheid governance model.

The intersection of a neo-liberal approach and a colonial edifice eroded the state’s capacity to fulfil the mission of the liberation struggle. This was about “uplifting the quality of life of all South Africans, especially the poor, the majority of whom are African and female.”

In a neo-liberal framework, the people’s sovereignty is replaced by the market. The public good is commodified. State and the citizens assume a transactional relationship in which citizens are characterised as customers.

New public management

During the 1980s a template began to emerge for state reform along neo-liberal lines. It was called new public management. It remoulded the administration of the state according to private sector principles and practices, which saw the state becoming more service ensurer than service provider.

The approach dominated the 1980s but waned in the 1990s. South Africa embraced it anyway, and used it to frame the post-apartheid model for state administration.

The new public management approach became a staple diet in the education of students of government. They were taught that the performance of the state was the function of the economic value of efficiency, largely derived from privatisation cuts in public expenditure. The key is to maximise output with minimum input costs. It’s not about the “social effectiveness” of the state’s action - enhancing the wellbeing of the citizens.

This approach spawned inequality. Society is stratified along socio-economic lines. The hardest hit are the poor while the business, political and bureaucratic elites rich live lavishly.

As I have argued elsewhere, “democracy in conditions characterised by inequities in socio-economic gains is not sustainable, particularly in South Africa with the history of many decades systematic marginalisation” of other races.

Can governance be fixed?

South Africa’s governance challenge can’t simply be fixed by reorganising the structure of government, such as by reducing the size of the public service. It requires rethinking the ideological edifice that frames it, and daring to decolonise the administration of the state.

To get there, the idea that government should be run like a business has to be jettisoned and the idea that it should be like a democracy embraced. This should be linked to the concept of the public good, where democracy should be given a human face.

Iain McLean, a British professor of politics at Oxford University, offers this conception of the public good:

any good that, if supplied to anybody, is necessarily supplied to everybody, and from whose benefits it is impossible or impracticable to exclude anybody.

So how can this begin to happen in South Africa? As a crucial first step, governance requires new narratives. These must transcend neo-liberal prescriptions and colonial-apartheid entrapment, replacing them with the notion of the public good.

Mashupye Herbert Maserumule, Professor of Public Affairs, Tshwane University of Technology

This article was originally published on The Conversation.