wpso-sort-order domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/democxmp/staging.democracyworks.org.za/wp-includes/functions.php on line 6131We require societies and democracies that are more sustainable, inclusive, and prosperous. Yet, we seem to be going backwards, both by objective performance indicators and by perceptions in many countries.
There is renewed, growing pressure on policy-makers, citizens, and the private sector to ‘do something, and do it differently, a pressure that has been building since the global financial crisis (GFC) and remains unresolved in many ways unaddressed.
In South Africa, some of the ground gained under democracy has been lost. The South African economy remains only partly transformed, remains highly unequal, and is constrained by poor skills, high public debt, and low business confidence.
At the same time, there may be a unique window of opportunity in the current COVID-19 and post-COVID crisis to shape new economies.
An essential dimension of shaping new economies must be the recrafting of economics itself to produce a different kind of economist.
Over the course of the twentieth century, economics has become a discourse with a uniquely strong claim on public thinking and policy-making. There are few, if any, current social, political, or environmental issues where the mainstream economic perspective does not play a decisive framing role.
Indeed, in much of the world, the economic perspective, closely allied to the language of business, not only shapes governance but functions as a central element of the meaning-making of societies, how success is defined and evaluated, of how citizens understand their identities and the choices available to them to achieve a fulfilling life.
At the same time, the mainstream model is facing serious internal and external critique. The internal critique is associated in part with developments in behavioural economics but goes beyond that to include all sorts of necessary broadenings.
The external critique relates to the serious loss of credibility of economic discourse and economic expertise in the broader awareness since the global financial crisis, which is about perceptions around economics and economists and expertise more generally.
How we define people economically determines the kind of economic change
How we define people economically determines our sense of what is and what isn’t possible by way of economic change.
Mainstream economics has always acknowledged that the ‘homo economicus’ of its models is a simplification that lacks realism in many ways but has defended it as a useful idealisation, an approximation that is fit enough for its purpose.
In a seminal essay, Lionel Robbins pointed to the ubiquity of scarcity and the necessity of choice as the fundamental dimension of life that generates the economic mode of thinking.
The bracketing of individual and social psychology, of the reasons underlying specific preferences, is done explicitly in economics to produce a core method that is scientific, in the sense of being value-neutral (since it can be used to think through and evaluate any means-end relation defined by scarcity).
Robbins did not think that it is necessarily greed or any one particular motivation, that is to be understood as the engine of human behaviour. For Robbins, economic man is an expository device rather than a thesis on ‘how people are.’ Along similar lines, Milton Friedman refuted the idea that the agent of economic thinking and modelling needed to be realistic in order to be useful.[1]
An economic person, then, can be understood as a rational optimizer of his own expected utility. If we understand him in this light, the thesis goes, we understand enough about him to explain and predict his economic behaviour.
It is as if, looking forward, we held all our preferences in mind, together with their ‘costs’ and the probabilities associated with them, and continuously and instantaneously solved optimization problems for ourselves.
In one sense there is nothing to fault in the effort to make economics as effective as science by stripping away those factors that are harder to formalise, predict and model. However, both Robbins and Friedman also required that the models be tested and found adequate against economic reality, in the simple, familiar sense that they explain economic phenomena, and on the basis of this accurately predict how specific exogenous changes might lead to changes in variables like price, supply, and demand in a given market.
It is not clear that economics is still fully up to this task, and there are three broad critiques of the mainstream model.
Behavioural economics has emphasised ‘supposedly irrelevant factors’ that cause choices to depart from expected utility assumptions in ways that are significant and predictable, but not rational in the homo economicus sense.
For example, humans are highly susceptible to priming: in games requiring trust between two players, outcomes differ significantly depending on whether, at the outset, participants are assigned labels such as ‘players’ or ‘buyers and sellers, with the latter leading to far less trust and cooperation (and thus to different economic outcomes).
We might say that mainstream economics has, ironically, assumed a free lunch when it comes to deliberation: it implicitly assumes an economic agent for whom thinking itself is costless, in that the agent is assumed to think ‘comprehensively’ about economic choices.
If thinking economically (ie optimizing) is not free and effortless for humans, if it takes time and energy, then we would expect human beings to economize on it: we might expect a heavier reliance on experience (whether justified or not), on intuition, on what others think, on mental short-cuts (‘heuristics’) than economists would posit.
A second dimension of critiquing the mainstream economic agent goes beyond the BE focus on how we do things ‘predictably irrationally’ to note that, in fact, we do very well as thinkers, given the radical uncertainty that defines much of economic reality.
Economics tends to assume that choice takes place within a probabilistic horizon where we know the fundamental context well enough to assign weights to various outcomes and risks. If uncertainty rather than risk is the norm, however, then ‘seeing right’, establishing what is going on, is crucial: the context is not given but must be established correctly.
In Radical Uncertainty, eminent British economists John Kay and Mervyn King follow others in suggesting that we speak of ‘evolutionary rationality,’ to make it clear that we are not dealing with mere irrationality, whether predictable or not, but with effective shortcuts and rules of thumb ways of making decisions given uncertainty and constraints of information, time and energy.
A third critique of the mainstream agent concerns the areas of identity, norms, and values, and the important role they play in what we prefer and how we choose. The core mainstream model generally treats them as exogenous and therefore diminishes their relevance when compared to the endogenous factors (price, income, preference, and the availability of substitutes).
Ethics, for example, matters not only as ethics, but also because ethics (like social values) strongly determine the preferences people hold, and thus also positive economics itself.
Stiglitz and Hoff write of the ‘enculturated actor’ who is open to change, for better or worse, based on culturally available models of behaviour; she is also open to learning from experience (again, for better or worse). Stiglitz and Hoff note that: “Just as economists have had to come to terms with the fact that individuals act in ways that are markedly different from those predicted by the economic actor model, an economist will have to come to terms with the fact that preferences and cognition are shaped by those surrounding us, and that these social interactions may be as important determinants of economic outcomes as the variables upon which economists have traditionally focused.” [2]
Akerlof and Kranton note that people experience a loss of utility when deviating from the norms associated with the social category (ies) where they find their identity and gain utility, conversely, not only from individual preferences but also from identifying with the norms of a group.
The evidence also appears quite clear that human beings do behave pro-socially and with genuine altruism, [4] certainly more so than the standard self-oriented theory of economics would posit, but that altruistic behaviour depends in part on perceptions of whether others are also participating fairly in the economy.
Altruism and pro-social behaviour are malleable and can be corroded or reinforced by the outcomes of interactions: the relative weight of social norms, as opposed to free-rider behaviour, is not a given. We can respond to cues, switch on and off this sense of fairness, and apply different models of what behaviour is needed in a given context, depending on our own longer-term social development and in response to previous outcomes of similar situations.
Mainstream economics is not as scientific as claimed
The perception of scientificness that economics has cultivated matters a great deal for the kind of legitimacy bestowed on the discipline: even when its dominance is resented, its authority is recognised.
However, as various crises have revealed and are revealing, mainstream economics may not be as accurate or rigorous as was once thought in understanding, predicting, and managing broader economic patterns, and its failure to do so is partially explainable through our changing views of what kind of system a modern, knowledge- and the finance-based system is.
The economic reality that economics treats, and that mainstream economic models are comfortable treating, is assumed to be 1) unchanging in its fundamentals and 2) stable.
‘Unchanging in its fundamentals’ does not mean that particular variables’ values remain unchanged, but that economies consist of atomistic, discrete building blocks and interactions between these building blocks. This is presumably the case for the natural sciences: the activities of human beings do not change the rules and basic components of the physical realm itself.
Economic systems, however, differ: because they are composed of reflexive entities that learn and behave strategically and interactively (that is to say people and their meanings), and because this learning and this strategic interactive behaviour is economic reality,[5] we cannot think in terms of an immutable reality that is ‘out there and simply needs to be ‘mirrored’ by a model. [6]
Learning takes place, bias features, participants are aware of each other, strategies change over time. These phenomena drive emergence: outcomes that cannot be determined in advance from the properties of the interacting entities. Systems with emergent phenomena are sometimes described as being adaptive complex systems: such systems may be stable, but they are not necessarily stable. Specifically, they do not necessarily exhibit negative feedback loops, countervailing or offsetting forces which tend to bring the system back to stability in the face of shocks.
These are not new ideas, but they have lost currency in the course of recent decades. Keynes recognised the added dimensions of complexity (beyond only price and preference) that arise around investment decisions such as picking a stock and used the analogy of a beauty contest, where the aim is to correctly judge who others on average will regard as the most beautiful. Such games (and they may be prevalent in all sorts of economic contexts) allow for 2nd and 3rd order effects, where adept players will integrate some sense of how other players who are confronted with the same problem as them are likely to think.
Second and third-order effects also mean, as in a financial crisis, that ‘animal spirits’ can enter a market, that the tendency for the system to self-regulate through negative feedback loops (the price mechanism in economics) can be eclipsed by a ‘herd mentality which moves outcomes remarkably far from the socially optimal ones.
Economics must be aligned with economic reality
An economics that is not aligned with economic reality, whether micro- or macro- reality, is unlikely to provide appropriate guidance and may impede the articulation and development of approaches that are more fit for purpose.
A simplistically rendered story of the superiority of markets regardless of context (ultimately grounded in a simplistic model of the agent as we touched on previously) and of the failure of collective provision, regardless of context, leads to biased democratic conversations, to the detriment of policy.
If the claims of economics are not claims beyond space and time, beyond history and power, but particular stories, then we can assess them for their usefulness, for the vested interests they serve.
In its alleged neutrality, its insistence on positive economics, and the impersonal working of the market, mainstream economics has also more or less completely eliminated ways to think constructively about ways power and history may have shaped it. At best, this can mean a narrower sense of things than we think is ideal; at worst, it amounts to a deep conservativeness that essentially legitimates whatever ‘market outcomes’ happen to be the case.
A risk is that economics dooms itself to a kind of irrelevance, a detachment from, for example, the ‘real world’ of policy-making if it hangs on too tight to a specific method (mathematical modelling) and specific assumptions (rational self-interest and the unproblematic aggregation of the social or macro from the individual or micro).
Experts help ensure that talk doesn’t veer off into mere rhetoric, they hold the facts or the best guess facts at a given point in time. Similarly, and partly in response to the rise of democracy in Europe and the demand for governance through knowledge rather than governance through power, economics sought to move from the shifty, ‘merely interpretive’ ground of language and verbal argumentation and anecdote (bundled under the term ‘political economy’) to mathematics, model-building and statistics.
On the other hand, governance only by expertise and via specialised language is not desirable. Economics is a key form of expertise in the service of governance and democracy, but it has become too technocratic, too narrow and inflexible, too ‘one size fits all,’ to serve democracy in the way that is required.
The economist, and economics, measure what is easy to measure, which often means what is already monetised or can be credibly and quickly monetised; even in advanced market societies, a great deal of what reproduces the economy, makes one economy perform better than another, is not monetisable at all, but rooted in social relations and norms, political cultures and the like.
Conclusion
Economic practitioners are sent out into the real policy world with a narrow set of tools and the conviction that these tools are powerfully explanatory in all contexts the practitioner may encounter; it should not be surprising, then, that economists typically adopt a ‘one size fits all approach to policy advice: they have been indoctrinated to do so, and the absence of systematic reflexivity in economics means there is very little doubt and very little humility in the mind of the practising economist.
It is also questionable whether economics training, particularly post-graduate training in typical economics departments, provides the right kind of preparation for what institutions like a reserve bank or a treasury actually need, which may be more ‘engineers’ and less pure theorists.
As in the well-known ‘shovels in a blizzard’ experiment, [7] it seems it is only economics or business students who do not see an ‘ethical’ problem with raising the price of shovels the day after a destructive blizzard, for example. This is economics training as enculturation, and indeed potentially toxic enculturation that combines authority with insulation.
Similar themes are raised in The Econocracy – The Perils of Leaving Economics to the Experts. Here the critique goes beyond the narrowly technical (that the workhorse neoclassical model of the economy was found to be lame when it came to running a real crisis race) to concerns that the technical language that accompanies the models has played a disproportionate role in policy and society, disproportionate relative to our state of knowledge, and disproportionate because these frameworks have placed an excessive degree of policy power in the hands of the technocrats wielding them. [8]
How should our revisioned economists think and conduct themselves, given a world of adaptive complexity rather than immutability and equilibrium, and a world that has seemingly grown more vulnerable to populist-style resentments against the Enlightenment values of reason and universality?
One shift would be to give less weight to the model and more weight to ‘locating oneself,’ the interpretive problem found in contexts where uncertainty (rather than only risk) exists. One could argue that just about every significant policy debate and decision is defined largely by the ‘locational-interpretive’ problem rather than a probabilistic one.
This point echoes Keynes on the need for both ‘art’ and ‘science’ in economic analysis: one can apply the science (the formal model, say) only when the art of correctly determining the context has been completed.
Further: if the economist is a kind of high priest of the journey to prosperity, even a modern-day ‘shaman’ – as suggested in a recent article by an EU MP[9] – then the training she receives should probably do far more to align her under-pinning values and normative reference points with the actual and needed values and interests of people and societies in which she ends up working.
Kate Raworth, in Doughnut Economics, expresses the problem well: “Humanity’s journey through the twenty-first century will be led by the policymakers, entrepreneurs, teachers, journalists community organizers, activists, and voters who are being educated today. But these citizens of 2050 are being taught an economic mindset that is rooted in the textbooks of 1950, which in turn are tooted in the theories of 1850… The twenty-first century demands that we make those assumptions explicit and those blind spots visible so that we can, once again, rethink economics.”[10]
Practically, this also implies more focus on inter-disciplinary studies, changes in economic curricula that put more weight on non-mathematical economics, economic history, and the philosophical foundations of economics, and a further rebalancing towards non-neoclassical approaches.
References
1. An Essay on the Nature and Significance of Economic Science, Lionel Robbins, and Essays in Positive Economics, Milton Friedman
2. ‘Striving for Balance in Economics: Towards a Theory of the Social Determination of Behaviour’, Karla Hoff & Joseph Stiglitz
3. Identity Economics, George Akerlof & Rachel Kranton
4. Altruism is behaviour that comes at a personal cost and benefits someone else.
5. George Soros articulated the notion of reflexivity to describe this property of economic systems.
6. Bookstaber in his post-global financial crisis (GFC) evaluation, The End of Theory, notes for example that: “Groups of people display patterns and structures of behavior (namely, emergent behavior) that are not present in the behavior of the individual members…For contemporary economics, this suggests that the pursuit of micro foundations for macroeconomics is futile. Even if individual behavior were perfectly understood, it would be impossible to draw useful conclusions about macroeconomics directly from that understanding, due to the aggregation problem.”
7. Richard Thaler discusses this in Misbehaving, his accessible account of behavioural economics.
8. The Econocracy: The Perils of Leaving Economics to the Experts, Joe Earle, Cahal Moran, Zach Ward-Perkins
9. ‘The economist as shaman: revisioning our role for a sustainable, provisioning economy’, Molly Scott Cato.
10. Doughnut Economics, Kate Raworth.
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The persistent attacks on the Constitution by populists, the incompetent and the corrupt have undermined the public legitimacy of the supreme law, unleashing a breakdown of rule and law generally, allowing competing despotic governance regimes such as customary law, local strongman “law”, and gangster “law” to gain traction as alternatives to the official democratic Constitution.
The Constitution is the overarching framework for all of South Africa. It provides South Africa with a fair framework and set of rules and values – which binds everyone – under which we can solve our difficult problems. It is the foundation stone of our democracy, the unifying symbol transcending racial, ideological and class divides. A Constitution expresses the common values of a country (Frankel Paul, Miller and Paul 2011; Lerner 2011; IDEA 2014). A Constitution shapes a common identity for a country, especially as diverse as South Africa, with a contested past, polarised along race, ethnic and political lines and suffering from historical injustices, inequalities, and resentments.
Former Chief Justice Arthur Chaskalson (2012) said: “The Constitution calls for positive action to confront the apartheid legacy of poverty and disempowerment and build a truly non-racial society committed to social justice. Transformation contemplates an improvement in the lives of people.”
Some ANC and opposition leaders view the Constitution as just any other document, subservient to ANC policies and other governance systems, and therefore open to change. Constitutions are higher laws above ordinary laws and cannot and should not be changed willy-nilly like any other law. The Constitution is, in fact, the “Holy Grail”. South Africa’s Constitution is most certainly the greatest African originated supreme law of the postcolonial era. It would be the genuine African solution for African problems if there were ever any.
The attacks on the South African Constitution have eroded the legitimacy of the supreme law and undermined the Constitution’s ability to serve its function of holding government and leaders accountable. The attacks on the Constitution have undermined it to such an extent to create a public perception. In a country where large numbers of citizens are illiterate, ill-informed, and lack knowledge about the workings of the political system, the Constitution is just like any ordinary law that can be changed at the behest of the governing parties and leaders.
The truth is that the attacks on South Africa’s democratic Constitution are often from leaders wanting to shield themselves from democratic scrutiny and accountability to continue to enrich themselves at the expense of overwhelmingly poor Africans. Failing to take responsibility for their corruption, incompetence, and mismanagement has left many in dire poverty and trying to protect themselves from prosecution for wrongdoing.
Constitutions are higher laws
A Constitution, a country’s supreme law, outlines the system of government, how power is responsibly exercised, the rules of behaviour, and citizens’ rights (IDEA 2014). Kader Asmal (2008), one of the writers on the Constitution, said: “The most important development making South Africa a better place to live in and possibly love is the Constitution, a guaranteed contract between South Africans as to how to organise our public and private lives. The Constitution, the result of an unprecedented national conversation among South Africans, which together with the Bill of Rights, is the bedrock of our freedom”.
A Constitution ensures that governing parties, when elected to power, manage a state under certain democratic rules, meant to ensure that governing parties and leaders govern for the common good of all citizens, not just the ruling party, leader or allied elites and constituencies. The South African democratic Constitution also removed the colonial and apartheid-era executive and parliamentary supremacy by compelling the executive to make decisions and Parliament to pass laws in line with the Constitution rather than what is in the interests of the executive or Parliament (Lamola 2022).
Constitutions prevent governments from forming party-states, personal rule or dictatorship in which ruling parties, individuals and dictators own the state. In such cases, ruling party constitutions and leaders’ personal dictates are more important than country Constitutions (Gumede 2017).
Constitutions are, therefore, the supreme accountability mechanism in a democracy. Constitutions hold governments accountable for public service delivery, governing in the common interests and protecting the rights of all. Undermining a democratic Constitution also undermines accountability. In many countries, whether advanced democracies or developing ones, “people who exercise political power, and claim to represent the will of the people, do not like being checked or balanced” (Gleeson 1999).
Nevertheless, most African countries’ constitutions are often regularly changed at the behest of ruling parties and leaders (Ghai 2010). African ruling parties and leaders change constitutions because they do not want to be held accountable for corruption, incompetence and violence against citizens. Constitutions that are not sacred and are changed at will when they do not suit the ruling parties and leaders, as is the case in almost all African countries, foster a lack of the rule of law, lack of accountability and lack of shared norms of acceptable societal behaviour.
How democratic Constitutions are undermined in Africa
Country constitutions are undermined in three ways across the continent. In countries run by African liberation and independence movements, such as the ANC, Zimbabwe’s Zanu-PF, and Algeria’s FLN, the constitutions of these movements often trumped their country’s constitutions. African liberation and independence movements’ constitutions are manipulated to serve the party leaders and elites, make them untouchable and exonerate them from prosecution for breaking the law (Ghai 2010; Gumede 2017).
In African countries, with large settler communities were at the end of colonialism or white-minority rule, democratic country Constitutions were jointly written by liberation movements and outgoing colonial or white-minority governments; when these liberation movements failed in power, they blamed the country Constitutions for their very own failures, describing constitutions as “colonial”, “Western” or anti-African (Gumede 2017).
This was the case in Zimbabwe when Zanu-PF’s Robert Mugabe, after murdering tens of black Zimbabweans who did not support his party, plundered the state and failed to deliver public services, then blamed the supposedly “colonial” Constitution, which, ironically, Zanu-PF was the co-author of, instead of taking responsibility for the government’s failures (Mandaza 1986; Bond and Manyanya 2002; Gumede 2017).
In May, Namibian President Hage Geingob, told traditional leaders “don’t go to white courts, because our courts are basically former white courts”, in reference to the country’s courts (The Namibian 2022). Geingob claimed traditional leaders must use customary law to resolve disputes, rather than the country’s Constitution, courts and laws (Vatileni 2022). Namibian State House press secretary Alfredo Hengari said Geingob want disputes between traditional leaders “be solved in accordance with the customs and traditions of the communities, as opposed to the modern court system of our republic” (Vatileni 2022).
In other instances, Namibia’s Swapo has often put its party constitution above that of the country’s Constitution – with its leaders demanding that members and supporters refer to the party’s Constitution rather than to the country’s one (Katjavivi 1988; Horn 1989; Van Wyk 1991; Erasmus 2002; Okpaluba 2003; Bösl, Horn and du Pusani 2010). Similarly, in Cape Verde, the African Party for the Independence of Cape Verde (PAICV), also saw the party’s constitution as above the country’s 1980 post-independence Constitution.
In African countries where the military, monarchies, and religious and personal dictators are in charge, the country constitutions also exempt these ruling elites from being held accountable (Ghai 2010; Gumede 2017). Similarly, in the group of African countries which are run by ethnic-based parties and leaders, constitutions are written or changed to serve these ruling ethnic elites (Gumede 2017). Governing parties and leaders changing constitutions at will to suit themselves or exempting themselves from adhering to them is one of the main reasons why development has failed, public services have collapsed, and instability has been the norm in most post-colonial African countries.
African liberation movement governments see country Constitutions as ordinary laws
Many former liberation movements turned governments continually change Constitutions – as if Constitutions are normal laws, to escape accountability.
In Algeria’s successive National Liberation Front (FLN) governments have seen themselves as above the Constitution and have behaved unconstitutionally when it suited them. Algeria’s National Liberation Front (FLN) after independence in 1962 from French colonialism was unenthusiastic about the constitutional rule. Leaders and members of Algeria’s FLN saw the party’s Constitution as above that of Algeria’s post-independence Constitutions (Soustelle 1957; Stone 1997). The FLN party constitution was based on democratic centralization (Chabal 1983). Immediately after independence, a Constitutional Assembly was established under the leadership of Ferhat Abbas to draft a new Constitution.
However, the FLN and its leader Ahmed Ben Bella, sidelined the Abbas-led Constitutional Assembly and enacted a Constitution that declared Algeria a one-party state. The FLN said: “The classic presidential and parliamentary systems cannot guarantee this stability, whereas a system based on the preeminence of the sovereign people and the single party can effectively ensure it” (Constitution of Algeria 1963).
Algeria’s first post-independence constitution was adopted by referendum in 1963. Under Algeria’s first post-independence Constitution the President, then Ben Bella was designated as Head of Government, Chief of State and Supreme Commander of the Armed Forces. The President had the ultimate power to draft and executive policies, without any legislative oversight or any other democratic oversight (Humbaraci 1966; Merle 1967; Nelson 1978, 1986; Chapin Metz 1994).
In 1965, Ben Bella was deposed in a military coup by Houari Boumedienne, who promulgated a new Constitution in 1976, which created a single-party system, with Boumedienne, the President, with total power. When Boumedienne died in 1978, his successor Colonel Chadli Bendjedid, in 1989, following student strikes and riots over corruption, political repression and economic hardships, the year before, introduced a new democratic Constitution, with a multiparty system, reducing the role of the military and partial individual freedoms.
In the 1991 elections, based on the new 1989 Constitution, with the Islamic Salvation Front poised to win, President Benjadid dissolved Parliament, abolished the 1989 Constitution and cancelled the next round of elections and banned the ISF, unleashing a violent civil war.
Following the end of the civil war, the FLN in 1996, reinstated the 1989 Constitution, with a bicameral legislature, with strong executive powers for President, two-term presidential limits and all ISF and all Islamist parties declared illegal (IDEA n.d). The reinstated Constitution went through amendments until 2008 (Constitute 2022). In the 2008 amendments, then-President Abdelaziz Bouteflika removed the limits on two terms to run for a third term in 2009 (Delabroy 2008).
Following the 2011 Arab Spring Uprisings in North Africa, Algerian President Abdelaziz Bouteflika enacted constitutional amendments, which were adopted in 2016, and which among others introduced presidential limits to two terms (Allouche 2020). However, Bouteflika, then ailing and 82-year old, decided to stand for a fifth term in the 2019 presidential elections, going against the new Constitutional provision for two terms only (Britton 2019). After weeks of protests, Bouteflika in March 2019 withdrew from his fifth term presidential run.
Cape Verde was governed since independence in 1975 from Portugal by the African Party for the Independence of Guinea-Bissau and Cape Verde (PAIGC), and following a coup in 1980 in Guinea-Bissau, the two islands and the party split, the Cape Verde wing of the party renamed itself the African Party for the Independence of Cape Verde (PAICV) (Meyns 2002; Baker 2006). Cape Verde adopted a new Constitution in 1980, but the Constitution was revised continuously, in 1990, 1992, 1995 and finally in 2010 (Pereira, Nina and Delgado 2019). The 1980 Constitution called for a one-party state, with the PAICV declared the only legal party (PAICV 2018).
Following the collapse of the Cold War at the end of the 1980s, mass local street protests, like elsewhere in Africa called for democracy, forcing the PAICV to call an emergency national congress in February 1990 to make constitutional changes, introduce democracy and multiparty politics (Meyns 2002; Baker 2006; Pereira, Nina and Delgado 2019).
Civil society organizations formed an umbrella political organization, the Movement for Democracy (MPD) in April 1990, calling for multiparty elections, to which the PAICV agreed. The PAICV ended the one-party state in September 1990 and called elections for January 1991. The MPD won the 1991 elections. The new elected MPD government 1992 enacted a democratic Constitution which promoted multipartyism, a strong Parliament and presidential powers that can only be exercised with Parliament (Canas and Fonseca 2007; Costa 2009; Beuman 2016).
Presidential powers were significantly reduced in the 1992 constitutional revisions. The head of state could not dismiss the Prime Minister and dissolve Parliament. The 1992 Constitution established the independence of the judiciary. Up to then, the judiciary deferred to the executive. The MPD governing party amended the Constitution again in 1995 – this time to increase the powers of the President.
In 1999 the country introduced new constitutional amendments, to establish a Constitutional Court and a National Ombudsman. The new Cape Verde Constitution was passed in 2010. The new 2010 Constitution can only be amended by a two-thirds parliamentary majority, to prevent further manipulation the Constitution has happened and in many African countries, governments by liberation and independence movements turned into governments (AfDB 2012). The President is elected directly by citizens at home and abroad. The 20210 Constitution make it one of the least presidential in Africa. Traditions and customs are only legal if they adhere to the Constitution and respect human dignity.
Wrongly blaming the Constitution for public service delivery
Many South Africans poorly understand that the Constitution, the country’s supreme law, is not a structure responsible for delivering public services but outlines the system of government, how power is responsibly exercised, the rules of behaviour, and citizens’ rights. The government elected to power is responsible for public service delivery. Albie Sachs (2017), former Constitutional Court judge and one of the writers of the Constitution, said: “The Constitution is not self-executing. It does not in itself provide equality, build houses, deliver education and health services, or offer protection against violence. It does do to establish a social, moral and institutional framework within which these issues should be tackled”.
Worryingly, South Africa’s model democratic Constitution is increasingly wrongly made the scapegoat for government failures to create jobs, slash poverty and provide quality public services. Former Rural Development and Land Reform Minister Gugile Nkwinti (2011) said: “the constitution has to help the community advance. If advancement gets stalled, then the Constitution has to be changed”. Former Justice Minister Jeff Radebe said (2012) about the Constitution, there “are no holy cows”. “There are scare tactics the media uses that suggest we are not allowed to talk about constitutions, and it seems heretical for us to say we might change the constitution,” said Radebe.
More recently, Lindiwe Sisulu, the Tourism Minister, as part of her campaign to contest the presidency of the ANC at the party’s upcoming December 2022 national elective conference, dismissed the Constitution as “a neo-liberal constitution with foreign inspiration, but who are the interpreters? Furthermore, where is the African value system of this Constitution and the rule of law? If the law does not work for Africans in Africa, then what is the use of the rule of law?” (Sisulu 2022). Sisulu blamed the “sea of African poverty” on the Constitution, questioning the “agency” of the country’s overarching document, asking: “What has this beautiful Constitution done for the victims [of colonialism] except as a palliative (Panadol)?”. Sisulu called judges upholding the Constitution as “house negroes” and “mentally colonised” who are “settled with the view and mindset of those who have dispossessed their ancestors”.
The irony is that the Constitution was not only written by South Africans, including mostly black ones, but also by the ANC. The Constitution has many of the principles cobbled together in the ANC’s 1988 Constitutional Guidelines for a Democratic South Africa. The Constitution also encapsulates the values of the 1955 Freedom Charter (Congress Alliance 1955; ANC 1988).
The key public delivery failures, often blamed on the Constitution – have nothing to do with the Constitution. However, it is a direct result of the failure of government implementation because of a combination of the government appointing incompetent and corrupt cadres to public positions and service providers, allowing corruption to proliferate and adopting non-sensical policies and ideologies. Many ordinary citizens poorly understood that government failure has very little to do with the Constitution but is directly the result of the government’s failure. Many ANC leaders have used the Constitution to scapegoat for their governing failures.
Populists, the dishonest and the well-meaning but ignorant, over the years have persistently but wrongly blamed the Constitution for allegedly being against transformation, understood as providing public services, development, opportunities and democratic participation beyond voting, to previously disadvantaged communities. Even if the aspects of the Constitution that are supposedly blocking “transformation” are to be changed, it is unlikely that the government’s delivery of public services will improve. It is more likely that government service delivery will further deteriorate in most cases.
In fact, if not for the protection of the Constitution right now, the effects of poor governance would have been even worse – public services would have totally collapsed, rather than just deteriorated, plunging South Africa into a fully-fledged failed state much earlier. The truth is that the attacks on South Africa’s democratic constitutions are leaders wanting to shield themselves from democratic scrutiny and accountability so that they can continue to enrich themselves at the expense of overwhelmingly poor Africans, failing to take responsibility for their corruption, incompetence and mismanagement which have left many in dire poverty and trying to protect themselves from prosecution from wrongdoing.
In many cases since 1994, it was only after poor communities and civil groups used the Constitution and appealed to the Constitutional Court that the government eventually delivered on its constitutional duty to provide low-cost housing and HIV/Aids drugs for the poor. Alternatively, in other cases, ordinary citizens, civil society and communities had to use the obligations under the Constitution to force Parliament, provincial legislatures and municipalities to hold elected and public officials accountable, as in the case when former President Jacob Zuma used taxpayers to refurbish his personal compound, Nkandla to the tune of R280m. Fixing the wrongs of the past does not need the Constitution to be changed. So-called “anti-transformation” clauses in the Constitution cannot be blamed for government failures.
The problem with all these issues is not the Constitution, but because either an incompetent public service (mainly because the best people are not appointed to jobs) and wastage and corruption go unpunished because the culprits are powerful party leaders.
The Constitution is not “anti-transformation.”
Those in the governing ANC, parties that are breakaways from the ANC, such as the Economic Freedom Fighters, and populist and traditionalist parties of the left and right who wrongly say the Constitution undermines “transformation”, appear to have around five key issues with it.
The first is the property clause in the Constitution, Section 25, which provides “market value” to be paid for expropriated land for a public purpose, such as land reform. Even former land affairs minister Gugile Nkwinti (2012), a strident supporter of changing the Constitution to allow for land expropriation without compensation, had readily conceded that the willing-buyer, the willing-seller principle may be a problem but was not the “worst impediment” to land reform.
The Constitution already allows for land expropriation – so it is not the Constitution that is the obstacle, public sector incompetence, because of “deployed” ANC cadres without the skills being appointed to manage land reform, and corruption – redistributing land to political connected ANC cadres and public servants are the problem. Land reform so far has been astonishingly incompetent. Learning from successful land reform elsewhere is very clear: land reform must be pragmatic, honest and focused on empowering those already in farming. Furthermore, based on promoting export-focused industrialisation and food security – not based on ideology, populism and revenge. Rather than pragmatism, promoting export-focused industrialisation and food security.
Inflated land prices are a problem, but this does not require a change of the Constitution. The government can easily introduce a ceiling based on fair commercial values where appropriate – without changing the Constitution. Importantly, even if the government changes the Constitution to allow for expropriation without payment, the current implementation problems will not only remain but there will be free-for-fall corruption of land to cadres, which will collapse food security, and property rights across the economy and lead to a massive capital, skills and investment flight.
Former Chief Justice Arthur Chaskalson rightly argued that the Constitution did not prescribe that compensation for land reform should be “what a “willing buyer” would pay “a willing seller”. However, the Constitution [Section 25(3)] requires the compensation, and “the time and manner of payment” to reflect “an equitable balance between the public interest and the interest of those affected” and having to satisfy several other requirements. Paying market value is one of those requirements. However, there are also others, including the history of the acquisition and use of the property, the extent of state investment and subsidy in it, and the purpose of the expropriation. In my view, these provisions and the relatively unrestricted fiscal power vested in the national government under Chapter 13 of the Constitution would permit the adoption of a reasonable land redistribution policy”.
The Constitution [Section 25(5)] and subsection 4 of the property clause of the Bill of Rights provide for expropriation of property in the public interest, which includes “the nation’s commitment to land reform, and to reforms to bring about equitable access to all South Africa’s natural resources”. The 2017 High-Level Panel on the Assessment of Key Legislation and the Acceleration of Fundamental Change, chaired by former President Kgalema Motlanthe, established to investigate the impact of laws since 1994, found that land reform and restitution had been a failure, but not because of the Constitution. It found the failure of land reform was due to a combination of lack of implementation, corruption, mismanagement and inadequate budget allocation. The 2017 High-Level Panel concluded that the “Constitution provides for positive land rights in Sections 25(5), (6), (7) and (9). These are the rights to equitable access (redistribution), tenure security and restitution. These rights are not being adequately promoted, enforced and protected. Instead, they appear to be under attack from policies and practices that redirect the benefits of land reform to potential political alliances with specific elites.”
Mike Mlengana, the former Director-General of the Department of Agriculture, Land Reform and Rural Development, resigned abruptly in July 2020, saying among the reasons for him leaving include widespread inefficiencies at all levels within the department, the department structures and human capital not being geared for effective implementation of plans to develop and support South Africa’s agriculture sector and an “absolute lack of delivery knowledge and work ethic” at all levels and the lack of will to tackle corruption and holding officials accountable (Phillips 2020).
Another constitutional issue is apparently Section 217 (1) of the Constitution, which requires all organs of state to “have a procurement system which is fair, equitable, transparent, competitive and cost-effective”. Former government spokesperson Jimmy Manyi (2010) said disadvantaged individuals regularly lose their court bids when trying to obtain tenders because of this provision of the Constitution. “It appears the Constitution does not support the transformation agenda in this country,” Manyi said when he was president of the Black Management Forum. In 2016, then government Chief Procurement Officer Kenneth Brown said as much as 40% of the government’s annual R600bn budget for goods and services are being stolen by inflated prices from suppliers, fraud and corruption. The real problem is that some individuals want government tenders to be given to them, their associates or family members solely based on their political connectedness or blackness, even though they may not have the capacity to deliver. Corruption in the government procurement system has become endemic.
Some ANC leaders also appear to have a problem with the sections of the Bill of Rights, chapter 2, in the Constitution which guarantee human rights, enshrines freedom of expression and guarantees everyone the right to “enjoy their culture”, provided it does not undermine other constitutional rights, such as gender equality. Some ANC leaders wrongly believe that the human rights provisions in the Constitution make it difficult for the police to prosecute criminals. Former Defence Minister, the late Joe Modise (1999), said that criminals had been given “too many rights” when drafting the Constitution.
The late lawyer George Bizos told the Farlam Commission of Inquiry investigating the massacre at Lonmin’s Marikana Mine that then National Police Commissioner Riah Phiyega had alleged during a radio interview with radio presenter Redi Thlabi that criminals in South Africa were “absolutely brazen because we have a beautiful constitution that allows rights” (Sosibo 2013). Nevertheless, Bizos rightly rejected blaming the Constitution for a rise in criminality. Bizos cited former police commissioners Jackie Selebi and Bheki Cele, who had said that criminality among high-ranking police officers and police brutality could be among the reasons for the rise in hard-core criminality. “Couldn’t the criminality be a result of the inefficiency of the police force, as it was renamed? Couldn’t it be that they are brazen [criminals] because of the number of complaints received about police torture and ill-treatment of arrested persons?” (Sosibo 2013).
Cultural practices that undermine constitutional values, individual dignity or safety, degrade women or allow traditional leaders to do as they please with no accountability cannot and should not be defended at all. The irony is that the Constitution used the African principle of Ubuntu, a democratic, caring and dignity-enhancing aspect of African culture, rather than one that makes women unequal, gives leaders unequal power or allows violence against others. Justice Minister Ronald Lamola (2022), in response to the recent attacks by Tourism Minister Lindiwe Sisulu on the Constitution, in which she alleged the Constitution was unAfrican, rightly asked: “What could be more African than the spirit of Ubuntu? What then is the basis of criticising the same court that has used Ubuntu as a beacon for all its future jurisprudence?”
The right to freedom of expression enshrined in the Constitution has also been a bugbear for many ANC leaders. Some ANC leaders do not want their shenanigans to be publicly exposed – they, therefore, are opposed to freedom of expression, which allows for the exposure of wrongdoing. Jimmy Manyi (2010), when he was president of the Black Management Forum, said he and many others had a problem with freedom of expression, which was enshrined in the Constitution, saying the media had taken the freedom of expression “too far” because of its criticisms of the corruption under then-President Jacob Zuma. “Why is it that the media can have a field day railroading the president’s office without impunity?”, Manyi asked at the time. Yet, the ability to criticise the government for poor delivery helps hold the government to account. Governing honestly and effectively is the best antidote to criticism.
For another, many ANC leaders believe they are above the Constitution by virtue of being “leaders”. Many calls for changes to the Constitution are for self-enrichment or to prevent leaders from being held accountable for wrongdoing. It appears increasingly that some individual ANC leaders reckon the Constitution must be changed to give them immunity from their own personal wrong actions. Many ANC members appear to believe that because the ANC was the governing party that writes the country’s laws, they, as “leaders”, are above the Constitution, laws and democratic moral values. Former President Jacob Zuma defied the Constitutional Court, which enforces the values of the Constitution. The Constitutional Court ordered Zuma to appear before the Zondo Commission into State Capture; however, he refused, rejecting the Constitutional Court and, by implication, the Constitution as if he was above the Constitution, democratic institutions and the law. Zuma was rightly jailed for contempt of court for defying the Constitutional Court.
Justice Minister Ronald Lamola (2022) rightly said that the “most of the gains we have made as a nation since 1994 has been because of the Constitution”. The enforcement of the Constitution by the judiciary has “brought about a much more equal society, where human dignity places a central role” (Lamola 2022). The Constitutional Court in 2004 found that section 23 of the Black Administration Act of 1927 violated the rights to equality and dignity under the Constitution (Constitutional Court 2004). The Black Administration Act entrenched customary law, violating the rights of women and children and making them unequal to men. The Black Administration Act, which allowed only men to inherit assets, and excluded women and illegitimate children from claiming inheritance, was essentially a parallel law to the Constitution, which excluded black African women and illegitimate children from their constitutional rights to equality.
The Constitutional Court concluded in the Soobramoney case (1997) that the state is obligated to deny a person who does not have the income a remedial treatment necessary to forestall harm in the case of a sudden catastrophe or emergency. In the Grootboom case (2001), the Constitutional Court judged that the state has an obligation to provide children and their parents who live in extreme conditions of homelessness with shelter. It essentially determined that the state has an obligation under the Constitution to implement socio-economic rights within available resources.
The Treatment Action Campaign successfully in 2002 petitioned the Constitutional Court to make the antiretroviral drug nevirapine widely available at public health facilities to pregnant women to prevent mother-to-child transmission of HIV/Aids and to oblige the government to implement and set out clear time frames for a national programme to prevent mother to child transmission of HIV, including voluntary counselling and testing, antiretroviral therapy, and the option of using formula milk for feeding. At the time, the use of Nevirapine was limited to only a small number of pilot sites, two per province, meaning that only about 10% of all births in the public sector benefited. The Constitutional Court (2002) said that all South Africans have the equal right to access health care services – and that limiting Nevirapine to pilot sites only violated the state’s obligation to provide health services equitably to all. The Constitutional Court also pronounced that the state has an obligation to provide healthcare for children when “parental or family care is lacking”.
Competing governance systems to that of the Constitution
South Africa has competing governance systems to the Constitution to which citizens swear allegiances to their private and public life rather than to the Constitution. The ANC is a liberation that has its own Constitution, values, and culture that many leaders, members, and supporters see as above the country’s Constitution. Many aspects of the ANC’s Constitution contradict the Constitution. When he was president, former South African President Jacob Zuma warned ANC leaders and members that the ANC’s law was above that of the Constitution.
For example, some time ago, Former President Jacob Zuma warned that ANC MPs should serve the ANC first before the Constitution (Makinana, Stone and Nhlabathi 2016). Zuma said: “ANC leaders in government should not regard South Africa’s Constitution as ‘more important than the ANC because this would land them in trouble”. Leader of the Congress of the People, Patrick Lekota, responding to Zuma’s anti-Constitution statement said that elevating the ANC as above the country’s Constitution “is an absolute disaster” for democracy and “reduce to nil whatever gains of democracy we have cherished and continue to hope will become” (Van Onselen 2008).
The irony is that in South Africa, the large majority of South Africans in the former Bantustans are not under the jurisdiction of the democratic Constitution but under the jurisdiction of customary law, the so-called African traditional “law”, which is being called for by populists, representing, in fact, a parallel state. Although customary law is recognised in democratic South Africa, it is meant to be subject to the Constitution, democratic institutions and laws; however, it has been operating above the Constitution.
South Africa’s former homelands, where customary law is the norm, have been entrenched as it was during the apartheid era, with unelected kings, chiefs and traditional leaders and their councils controlling communal land, negotiating mineral rights and prospective business deals on behalf of the community, without any consultation with the community required. Any community member objecting is likely to be banned from using the communal land, excluded from any other communal income and violently punished by traditional kings, chiefs and leaders, who threaten their “subjects” as if they own them, control “communal” land and set their own laws under the pretence of African “tradition”, “laws” and “culture”.
The governance system of traditional chiefs, leaders and structures, and its guiding ideology of patriarchy, directly challenges and competes with South Africa’s democratic Constitution, laws and values. Pockets of many rural areas have turned into parallel states, where traditional kings, chiefs, or leaders have turned these areas into their quasi-states, parallel to South Africa’s constitutional state (Mnisi Weeks 2015). In particular, South Africa’s former homelands have been entrenched as it was during the apartheid era, with unelected kings, chiefs and traditional leaders and their councils ruling without democracy, controlling communal land and mining rights, with citizens having little rights and where gender equality is a foreign concept. The system of African traditional chiefs, leaders and structures should be abolished or, if retained, reformed to be in line with constitutional democratic norms to ensure social, gender and age equality and promote individuals’ freedom of choice.
Some ANC leaders take cover under “traditional law” when they want to escape accountability for wrongdoing under the Constitution. There have been many calls from some ANC leaders, specifically former ANC and South African President Jacob Zuma, for supposedly “African” law to be arbitrary of their actions and not South Africa’s Democratic Constitution. A case in point was when former President Zuma said that he needed to be judged by African’ law’ when he built a R2480m private home with taxpayers while his supporters lived and died in grinding poverty; more than R1.5trillion have been siphoned off through corruption during his government and when he appointed incompetence cronies to democratic institutions, the public service and SOEs, leading to state collapse, factory closures and mass unemployment.
In many cases, organised criminal groups and gangs control townships where they implement their own gang governance systems. These gang governance systems are above the Constitution. The Constitutional rules, values, and laws do not apply in these areas. Sadly, every township citizen under the “jurisdiction” of these gang governance systems has no access to the rights in the Constitution.
Conclusion
The South African Constitution was not foisted on the country or written by foreigners – whether colonisers, non-Africans or Western “imperialists”. It was written by leading indigenous African legal minds. Most of them are supporters or members of the now governing ANC – whose leaders, members and supporters now, to escape being held accountable for corruption, incompetence and non-delivery, blame the Constitution as a scapegoat. Ordinary citizens, civil society and the media must use their constitutional rights better to hold public and elected officials accountable and ensure that democratic institutions give better effect to the Constitution. All competing governance systems to the Constitution must either be abolished, made illegal or transformed to align with the Constitution. Customary law should be aligned with the Constitution. The parts of customary, sharia law or any other religious or traditional law that undermines the Constitution should be abolished.
The ANC and all other political parties’ constitutions must be aligned with the Constitution. Political parties should not receive public funding unless their constitutions and values align with the Constitution. The Constitution is a social-democratic document that sets political, human rights, socio-economic rights, redistribution imperatives and nation-building goals for the country. The South African Constitution is one of the greatest indigenous African legal documents ever written – admired by many cultures, societies, and countries, including Western ones outside the continent.
Honest, competent and accountable government and leaders – and citizens, civil society organisations and the media holding elected and public officials accountable will considerably improve public service delivery, development and economic growth. South Africa needs a mass campaign by civil society organisations, businesses, the media and political organisations to increase the knowledge of the role of the Constitution – to prevent the campaign by the corrupt, the incompetent and populists to blame the Constitution for their own incompetence in government, to cover-up their corruption and to shield them from being held accountable. South Africa’s democratic Constitution, although under heavy fire for a long time now from the corrupt populists and opportunists, has considerably slowed down the country’s slide into a failed state.
What is clear is that there is a profound lack of knowledge among South Africans about the Constitution. Government, opposition groups, civil society organisations and the media must raise awareness about the Constitution. Organised businesses should introduce educational programmes about the Constitution in company induction and learning programmes. Basic education on the Constitution should also be introduced to all public and elected officials. Finally, the Constitution should also be introduced at nursery, primary, high school, and tertiary education levels. Greater about the Constitution will boost ownership among all South Africans of the country’s foundation document.
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Morals determine what we believe is right or wrong and “whether we do whatever we can get away with” (Nygren 1996). A person’s conscience is the “moral sense of right and wrong”, which guides a person’s behaviour, decision-making and actions. Integral to conscience is the consciousness of having “a feeling of obligation to do right or be good.” Ethics is a system of moral principles regulating the conduct of an individual or community, and values are the standards of behaviour or “one’s judgement of what is important” behaviour, based on beliefs and attitudes (Churchill 1982; UNESCO 1991; Rennie 2007).
Morals are also determined by how one’s fellow citizens, community and society hold one accountable for behaviour, decisions, and judgements (Gumede 2012). There is, therefore, an accountability dimension to moral values. A breakdown in accountability structures within communities, businesses, and government also erodes moral values (Gumede 2012). There appears to be a normalisation or “socialisation” of corruption of moral frameworks and values in South Africa because moral corruption has become embedded in the governing ANC, the public service, traditions, religions, businesses, and communities. The corrupt, like former President Jacob Zuma, hero-worshipped. Individuals “self-rationalise” wrong behaviour that would “otherwise violate their internal moral framework” (Taylor 2016: 4). In such “self-rationalisation” – everyone is doing it, there is a “denial of responsibility, denial of injury, denial of the victims” of corruption (Taylor 2016: 3; Heffernan 2011). Those that do wrong do not see themselves as doing anything wrong because wrongdoing is normalised.
The moral corruption of the ANC contributes to a moral breakdown in all areas of society
Many of the country’s overarching societal good moral value systems have been broken for several reasons. The governing ANC is systemically corrupt – many of its leaders, values and organisational culture have been deeply compromised. Systemic corruption within the governing ANC has also corrupted good moral values across broader society. A governing party sets the tone for the behaviour of its members and broader society. As far back as 2015, Gwede Mantashe, when he was ANC general secretary, said in his organisational report that corruption is a “critical” challenge for the ANC, which “diminish the standing and dent the image of the organisation” (ANC 2015).
The ANC governs the country as a party-state, where the party and the state have become almost one and the same, causing the South African state to become systemically corrupt (Gumede 2005). The corruption of the ANC party culture has also infused the state, which the party controls. In a country with a monopoly liberation movement such as the ANC, which has been in power for a long time, the governing party’s culture also dominates the state, business, and market culture of the country.
Power, termed “having the discretion and the means to enforce one’s will over others asymmetrically” (Sturm & Antonakis, 2015, p. 139), has transformed many ANC leaders into acting for party and self-interest rather than in the widest public interest. Power appears to have corrupted many ANC leaders’ moral reasoning, doing the wrong thing for self-interest rather than the right thing in the public interest.
Many ANC leaders appear to make moral decisions based on what the psychologist of moral development, Lawrence Kohlberg (1982), described as “what’s in it for me or through “you scratch my back, I’ll scratch yours, or that their fellow party members will find acceptable. The moral corruption appears to be so systemic that corrupt decisions by ANC leaders or peers are found acceptable by significant numbers of fellow party members, leaders, and supporters.
ANC leadership elections are increasingly manipulated, bought, or secured through violence, often killing competitors. The ANC has investment arms that tender for government contracts, partner with private and state-owned companies in public and private deals and the ANC, in many cases, compels white-owned companies, particularly those contracting with the state, to strike black economic empowerment deals with only ANC connected black individuals.
Some structures and leaders of the ANC are alleged to be in partnership with criminal gangs to capture parts of the state, whether policing, crime intelligence or tenders. Some individual ANC leaders are alleged to have business partnerships with criminal gang leaders – whereby gang leaders appear to be protected from prosecution in return for paying-off key ANC leaders. In some cases, it is alleged that criminal gangs in collusion with ANC members control government procurement contracts.
Because the ANC as a governing party is so dominant in society, the party’s corrupt values, culture and behaviours are also replicated across society. The country’s political, business and market culture may also become corrupt, with companies, professionals and ordinary citizens seeing nothing wrong in engaging in corrupt activities because it is how things are done. Because the ANC and the state are systemically corrupt, many of the country’s private companies, professional firms, and professionals, particularly those having to engage with the corrupt state, may themselves mimic the corrupt culture of the ANC and the state – or at least uncritically accept it, to fit in secure state contracts and positions. Because the ANC and government leadership behave corruptly, lower-ranking public and elected officials and ordinary citizens see corruption as the only acceptable behaviour.
The collapse of moral frameworks of traditions
African traditions, authorities and “customs” have in many areas allowed them to become thoroughly corrupted, manipulated for self-interests and used to oppress “subjects”. A typical case is that of Buyelekhaya Dalindyebo, the traditional king of the AbaThembu, who between 1995 and 1996 assaulted, kidnapped, and burned the homes of villagers in his jurisdiction who refused to defer to him. In 2009, Dalindyebo was found guilty of culpable homicide, kidnapping, assault, and arson for these despicable actions. Dalindyebo was sentenced to 12 years in jail for kidnapping, assault, and arson. Incredibly, Dalinyebo only served four years of his sentence after he was granted early parole by presidential decree in 2019.
In 2020, Dalindyebo was at it again, when he went on an attacking spree with an axe trying to assault his son, who had been appointed acting regent while he was in prison. Dalindyebo, like many traditional kings, chiefs and leaders, treat their “subjects” as if they own them, control “communal” land and set their laws under the pretence of African “tradition” and “culture”. The areas under their control are virtual no-go zones, with their own “moral” governance systems which compete with the Constitution, democratic institutions, and laws.
Sadly, many of Dalindyebo’s “subjects” still supported him fiercely despite the fact that he assaulted fellow community members. Many Dalyndyebo supporters twice marched to the West Bank prison in East London, calling for his release (SABC 2018). After his release, the Economic Freedom Fighters endorsed him. The EFF gifted Dalindyebo with a brand-new Mercedes Benz SUV (Eyewitness News 2021).
Over the years, African traditional kings, chiefs, and leaders have often come up with new “cultures”, “traditions”, and “customs”, which in most cases are created to strengthen their own powers over the lives of subjected peoples. It has been difficult to challenge autocratic traditional kings, chiefs, and leaders; because it is often seen as challenging African “identity”, “culture”, and “community”. Being perceived to be at variance with African “culture”, “identity”, and “community”; even if such “culture”, “identity”, and “community” is harmful to oneself and others – are often seen as shameful.
In 2006, Zuma was acquitted of raping an HIV/Aids positive activist, a close family friend half his age, who said during the trial that she saw him as a surrogate father. During the rape trial, he appallingly claimed he could tell by the way a woman sat or the dress she wore that she was ‘looking for sex’ and Zulu “culture” and traditions compelled him to oblige. A few weeks after his rape acquittal, Zuma made derogatory statements about gays and lesbians, implying it was against African “culture” and “traditions” (Gumede 2012). Sadly, the naïve, the well-meaning and the ignorant, in many instances, fall for the cynical manipulation of traditional customs by corrupt “leaders.”
Many ANC and opposition leaders often use African “traditions” selectively – fallaciously arguing when it suits them that they cannot be held accountable by the Constitution because they supposedly adhere to African “laws,” to escape being held accountable for wrongdoing, incompetence, and incompetence. Some government ministers blame the Constitution for poor public services when the government itself is responsible because of incompetence, mismanagement and corruption.
More recently, Lindiwe Sisulu, the Tourism Minister, as part of her campaign to contest the presidency of the ANC at the party’s upcoming December 2022 national elective conference, dismissed the Constitution as “a neo-liberal constitution with foreign inspiration, but who are the interpreters? Furthermore, where is the African value system of this Constitution and the rule of law? If the law does not work for Africans in Africa, then what is the use of the rule of law?” (Sisulu 2022).
Sisulu (2022) blamed the “sea of African poverty” on the Constitution, questioning the “agency” of the country’s overarching document, asking: “What has this beautiful Constitution done for the victims [of colonialism] except as a palliative (Panadol)?”. Sisulu called judges upholding the Constitution “house negroes” and “mentally colonised” who are “settled with the view and mindset of those who have dispossessed their ancestors”.
The moral collapse in African traditional customs, structures and authorities is clearly seen in the tradition of circumcision, which in some African communities (of course in many other non-African communities also) is seen as a rite of passage into manhood (Gumede 2015). There is very little moral outrage and intervention from “traditional leaders” when every year, hundreds of young men and boys die at initiation schools from botched circumcisions, assault, or dehydration. The lack of outrage – and immediate action – from government and traditional and cultural officialdom over these needless annual deaths is itself disturbing. The traditional initiation schools system in many areas has been corrupted – and should be abolished or handed over to civil society or the government to oversee.
Many of the “traditional surgeons” (iincibi) are often untrained to carry out circumcisions, are not registered with health authorities and are not held to basic standards. Corrupt traditional leaders are exploiting the fact that young men are culturally “obliged” to undergo the custom of circumcision to enrich themselves handsomely. African cultural practices which undermine individual human dignity, value and rights must either abolished immediately or reformed.
The Department of Traditional Affairs must properly regulate initiation schools, formalise them, and set appropriate standards. Government, communities, and civil society must properly monitor the schools. Teachers at these schools must be adequately qualified.
The curriculum of initiation schools needs to be urgently transformed. Manhood must be based on the democratic, moral, and behavioural values enshrined in our Constitution. The curriculum for initiation schools should be adapted to grapple with the new moral challenges of our time: including the notion of gender equality, safe sexual behaviour, the notion of ‘public’ service and discouraging the dominant ‘macho’ perception of maleness.
The moral debate over what constitutes appropriate African “traditions” for our times must be wrested away from those who argue culture for purely opportunistic reasons, such as self-enrichment and to shore up their own influence and bank balances.
The moral collapse of many religious institutions and frameworks
Almost 80% of South Africans say they are members of Christian denominations of one or the other. Many of the country’s religious institutions’ moral governance systems have also been corrupted.
In November 2020, self-proclaimed prophet Shepherd “Major 1” Bushiri and his wife Mary fled South Africa for his homeland of Malawi after accusations against them of fraud and money laundering worth R102million (Enca 2020). Before they fled, the couple was granted bail R200 000 bail by the Pretoria Central Magistrate’s Court.
Many Bushiri’s Enlightened Christian Gathering Church members came out in support of Bushiri during his court appearances in the Pretoria Magistrate’s court, despite his legions of alleged transgressions (Enca 2020). At Bushiri’s bail hearing in November 2020, supporters of his congregation dropped to their knees, singing and praying outside the Pretoria Magistrate’s court, singing in Zulu, “bring our parents” (Tshikalange 2020).
Televangelist Timothy Omotoso and co-accused Lusanda Sulani and Zukiswa Sitho in 2020 stood accused in the Eastern Cape High Court in Port Elizabeth of 97 charges, including rape, human trafficking, and racketeering, with 47 witnesses testifying against them (Manona 2021). Omotoso led the Jesus Dominion International Church. Supporters packed the courtroom during his court appearances. One of the victims, Hlubikazi “Vicky” Faleni, testified in court that Omotoso had asked her: ‘What would like me to be to you, to which she responded, ‘I’d like you to mentor me, be a father figure to me because my father passed away a long time ago (Manona 2021). However, Omotoso allegedly insisted she should be his girlfriend and went on to abuse her. Some of Omotoso’s supporters shouted abuse at Hlubikazi “Vicky” Faleni, one of the victims.
In 2014 Lesego Daniel, a self-proclaimed pastor who started the Rabboni Ministries in Ga-Rankuwa in Pretoria, told his church members to eat grass – which they did. In social media images, Daniel was seen standing on top of congregants, feeding them grass and slapping women church members as part of a supposed religious ritual (ENCA 2014a). Interviewed about it later by Metro FM radio station, he claimed the grass “was like food” to his church members.
Soon after that, Daniel was at it again, this time instructing his church members to drink petrol. In youtube images, his church members are seen drinking petrol at the church, while Daniel encourages them to do so (ENCA 2014b). Several of his followers who drank the petrol could be seen collapsing and writhing on the church floor (ENCA 2014b). His church members defended him when he was publicly criticised (ENCA 2014).
Ray McCauley, the leader of the Rhema Bible Church, told a hearing organised by the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities to propose
a code of conduct to regulate churches, said there are over 140 000 non-registered churches in South Africa, that are not paying taxes, are unregulated and conducting illegal activities. These churches do not account for their finances, and how they are governed and are not accountable for what they do (McCauley 2018).
“We want to be in a position where if people are (operating dens of) prostitution in their places of worship and selling drugs, taking money and (putting) it in a trunk and getting it flown out of the country, we need to able to deal with that” (McCauley 2018). Thoko Mkhwanazi-Xaluva, the CRL Commission chairperson at the same 2018 hearing in the management of churches said the “moral fibre” of the religious sector is seriously compromised and called for a code of conduct for churches to ensure religious leaders conduct themselves “ethically and effectively”.
Church pulpits are increasingly used by politicians not only to campaign for the votes of parishioners ahead of elections but also by corrupt politicians seeking the blessing of the church after they have been implicated in wrongdoing.
Former President Jacob Zuma, used populism to secure votes used the church, especially the Pentecostal and charismatic churches, to secure endorsement for his presidency, despite this tsunami of moral transgressions. Very arrogantly, Zuma tried to show his supporters that the ANC had been given a “divine right to rule”. Addressing the ANC’s 105th-anniversary celebrations in Soweto, Zuma made an analogy between the incarnation of Christ and that of the ANC (Zuma 2017).
“We believers never forget that, just like the Son of Man who came to wash away all of our sins, the birth of the ANC happened to free the people who were oppressed. We will never forget that, just like we don’t forget Christmas,” Zuma said (2017). On another occasion, Zuma predicted that “we [the ANC] will rule until Jesus comes back”.
In an editorial in the Southern Cross, the Catholic newspaper argued rightly that: “When Mr Zuma invokes his party’s divine right to rule, he is proposing that voting against the ANC represents an act of defiance against God. That is an affront to South Africa’s believers and to our democracy”. The Southern Cross editorial said that if Zuma really believes that the ANC was ruling by God’s mandate, the ANC will have difficulty explaining “how the looting of public funds … by ANC appointees complies with the Seventh Commandment” (Southern Cross 2017).
SA’s Constitution – the overarching moral framework is not recognised by many disadvantaged communities
The Constitution, which integrates the good elements of all the different moral frameworks of South Africa – whether religious, traditional, or civil, has been rejected by many ANC leaders, members, and supporters.
During apartheid, the oppressed communities saw laws as illegitimate, to be defied. These include laws governing anything from littering and queue jumping to taxi drivers ignoring traffic laws. However, in the new democracy, some formerly disadvantaged communities defy the Constitution, laws, and social norms as if they are still illegitimate, like during the apartheid era (Gumede 2020). During protests against government corruption, incompetence, and indifference, many formerly disadvantaged communities often destroy public and communal assets (ISS 2021). During the apartheid era, township residents protesting against apartheid authorities often destroyed government and white-owned infrastructure – which they argued only served whites and excluded blacks. In the post-apartheid era there is the misplaced idea that the destruction of public and communal resources and breaking the law during political protests are “militant” and “revolutionary” acts and akin to acts against the apartheid regime (Gumede 2020). Destruction, vandalisation and burning buildings, libraries, and laboratories during the Fees Must Fall protests cost universities R786million between 2015 and 2018 (Gumede 2020). This was the equivalent of the yearly government subsidy to one of the smaller universities. The Mafikeng campus of the University of North-West sustained R198m in damage after it was set alight.
Similarly, strikes by trade unions for increased wages and against retrenchments, which turn violent, are often excused supposedly on the basis that the action was for a “good” cause. In 2018, the National Union of Metalworkers of South Africa (NUMSA) and the Metal and Electrical Union of SA (MEUSA) members embarked on a strike at manufacturing, moulding, and packaging companies across the country when wage talks deadlocked (Mahlakoana 2018).
The 2018 NUMSA strike saw the burning of property, destruction of infrastructure and violence against non-strikers at plastics companies in Ekurhuleni, where the strikes took place. A security officer, Lesley Mphahlele, who was employed at Herber Plastic, died after he was doused with petrol and set alight, allegedly by the strikers (Mahlakoana 2018).
In the platinum belt of North-West and Limpopo provinces, violent protests almost every second day by community members against local mines over retrenchments, lack of community development and sharing of mining income have led to the closures of many mines over the past few years (Stoddard 2018).
Often mine infrastructure is destroyed, and employees are killed, as in the case in 2016 when six workers were burnt to death when the bus they were on was set alight by a petrol bomb when they travelled to their shifts at the Modikwa platinum mine operated by African Rainbow Minerals and Amplats (Stoddard 2018). Many mines have been forced to close down for long periods, with some abandoned – causing job losses and a lack of development and income for local communities. Many political, community and civil organisations hesitate to condemn individuals and organisations destroying public property, resources, and institutions during public service protests. Many corrupt politicians used apartheid as an excuse to cover up wrongdoing. They enrich themselves through corrupt means, saying the apartheid leaders did the same. In fact, corruption, lawlessness, and social disorder have also become entrenched because many formerly disadvantaged communities use apartheid to excuse their own corrupt, wrong, and disorderly behaviour.
Former President Jacob Zuma spent R280million of public money on his private compound, Nkandla, then claimed National Party leader PW Botha also had his private house refurbished when he was president. Many political, community and civil organisations are hesitant to condemn individuals and organisations destroying public property, resources and institutions during public service protests or using apartheid, like Zuma did, to excuse wrongdoing.
To restore the Constitutional moral framework, such behaviour, actions, and decisions should be made criminal, and prosecuted based on criminality, human rights abuses and destruction of public resources. Those who destroy public infrastructure and property and injure others during protests should also be personally held accountable. Organisations organising such violent protests should also be liable for damages, injuries, and deaths – to foster accountability.
Competing governance systems to the moral values of the Constitution
South Africa’s overarching moral framework, the Constitution,, faces competing for “moral” governance systems such as the ANC’s party “laws”, customary law, and gang laws. This means South Africa has a fragmented moral universe rather than a common, unifying one.
The ANC is a liberation movement with its own Constitution, values, and culture that many leaders, members, and supporters see as above the country’s Constitution. Many aspects of the ANC’s Constitution contradict the Constitution. When he was president, former South African President Jacob Zuma warned ANC leaders and members that the ANC’s law was above that of the Constitution. Zuma warned that ANC MPs should serve the ANC first before the Constitution (Makinana, Stone and Nhlabathi 2016). Zuma said: “ANC leaders in government should not regard South Africa’s Constitution as ‘more important than the ANC because this would land them in trouble”.
Customary law is a competing moral framework to the Constitution. The large majority of South Africans in the former Bantustans are not under the jurisdiction of the democratic Constitution but the jurisdiction of customary law, the so-called African traditional “law”. Although customary law is recognised in democratic South Africa, it is meant to be subject to the Constitution, democratic institutions, and laws; however, it has been operating above the Constitution.
South Africa’s former homelands, where customary law is the norm, have been entrenched as it was during the apartheid era, with unelected kings, chiefs and traditional leaders and their councils controlling communal land, negotiating mineral rights and prospective business deals on behalf of the community, without any consultation with the community required (Gumede 2012; Mnisi Weeks 2015).
Any community member objecting is likely to be banned from using the communal land, excluded from any other communal income, and violently punished by traditional kings, chiefs, and leaders, who threaten their “subjects” as if they own them, control “communal” land and set their own laws under the pretence of African “tradition”, “laws” and “culture”.
The governance system of traditional chiefs, leaders and structures, and its guiding ideology of patriarchy, directly challenges and competes with South Africa’s democratic Constitution, laws, and values.
Some ANC leaders take cover under “traditional law” when they want to escape accountability for wrongdoing under the Constitution. There have been many calls from some ANC leaders, specifically former ANC and South African President Jacob Zuma, for supposedly “African” law to be arbitrary of their actions and not South Africa’s Democratic Constitution. A case in point was when former President Zuma said he needed to be judged by African’ law’ when he built a R2480m private home with taxpayers’ money while his supporters lived and died in grinding poverty.
In many cases, organised criminal groups and gangs control townships where they implement their own gang governance systems. These gang governance systems are above the Constitution. Organised criminal groups are, in some cases, also operating as parallel states, handing their own justice, providing “services” and employment. In many townships, gangs form parallel states, controlling resources, setting “laws”, and forcing ordinary citizens to pay “taxes” to them in their “jurisdictions” (Kinnes 2017; Imray 2020; Cruywagen 2021). In these areas, the Constitutional rules, values and laws do not apply.
South Africa’s Constitution must become the overarching moral framework to guide every citizen’s daily lives. Unless the Constitution trumps all competing “moral” governance systems such as the ANC’s party “laws”, customary law and gang laws, the country’s moral universe will remain fractured.
The collapse of ethics of trusted professionals
The phenomenal rise in corruption by trusted professionals, such as auditors, medical doctors, and the legal profession, shows that professional integrity oversight systems and institutions have, in many cases, failed. Society generally views auditors, medical professionals, and the legal profession with higher regard because they hold positions that exercise public trust. They are expected to perform their duties with the highest ethical, personal, and professional standards – and act in the best interests of those they serve, whether it is shareholders, customers, or patients.
One of the reasons why these professions have entry examinations, professional associations and formal standards of conduct is to set basic principles of good behaviour. Society, therefore, views these respected professions’ ethical failures, corruption, and indifference with more alarm. A forensic investigation by PWC in 2019 revealed that 130-year-old household sugar giant Tongaat Huletts’ profits were overstated between 2011 and 2018. It showed that Tongaat’s 2018 profits were overstated by 239%. The company’s assets were overstated by 34% when executives overvalued sugar cane and backdated land sales (Gumede 2022).
The executives scored millions of rands in bonuses based on inflated company profits, with Peter Staude, the former CEO, receiving R94m in bonuses based on fraudulent sales. The company’s external auditors were stunningly silent about the unethical conduct of company executives over the years. Their case will be heard in the Durban High Court. The auditors were silent for all these years when the fraud happened. Deloitte auditor Gavin Kruger was charged with Tongaat’s implicated executives (Gumede 2022).
Similarly, in December 2017, one of South Africa’s largest companies, Steinhoff, revealed “accounting irregularities”, in which the company overstated profits over several years in a $7.4 billion accounting fraud. The scandal wiped out about $13.5billion, or 90% of its market valuation (Reuters 2019). The fraud happened between 2009 and 2017. Although Deloitte refused to sign off on Steinhoff’s financials for the year through September 2017, it later emerged that Deloitte had signed off previously similarly flawed audits.
Fourteen people, including Limpopo provincial ANC Treasurer Danny Msiza, VBS Chairperson Tshifhiwa Matodzi and bank and municipal officials, have been accused of looting VBS Mutual Bank to face more than one hundred charges (Sadike 2021). Fourteen municipalities in Gauteng, NorthWest and Limpopo lost more than R1.6bn unlawfully investing public money with the bank, contravening the Municipal Finance Management Act. In 2019, advocate Terry Motau released a report implicating ANC politicians, VBS Mutual board and management and municipal officials in wide-scale corruption, which led to the bank’s collapse.
In 2021, the liquidator of the now defunct VBS Mutual Bank, Anoosh Rooplal, sued KPMG SA for R863.6 million plus interest for signing off the bank’s 2017 financial statements as correct when there were material statements and fraud that should have been glaringly obvious to its auditors (Buthelezi 2021). KPMG is now rebuilding its reputation, led by a new CEO and Chairperson, after it audited the results of VBS Mutual Bank when close to R2billion was stolen at the lender.
Government figures show that almost R40bn is lost annually in the health sector through corruption (Gumede 2019). The Council for Medical Schemes (CMS) has warned that fraud, corruption, and waste cost the private healthcare system more than R22bn a year (Business Tech 2019). In 2019, President Cyril Ramaphosa launched the Health Sector Anti-Corruption Forum to tackle corruption in the public and private healthcare sectors.
In 2018, the ministries of justice, health and police announced a nationwide investigation into state attorneys and private practitioners accused of siphoning over R80bn from the government through collusion, fraud, and corruption (SA News 2018).
The corruption of supposedly respected professions points to multiple system failures. Professional associations for the legal professions, auditors and medical professions have spectacularly failed to uphold their members’ ethical, professional and behaviour standards. Many of these professions are self-regulated. However, in many cases, self-regulation has failed spectacularly.
Professional associations set basic principles of behaviour for their members. They generally have ethics codes, which provide a set of standards for conduct for members of the profession that issues the code. Off course, given the very corrupt state of government, regulation by the government of professions is unlikely to be better.
Corruption of regulatory authorities of professions’ have contributed to the spread of corruption in the professions. In many cases, supposedly independent regulatory authorities have been staffed by corrupt, incompetent, and uncaring ANC cadre deployees. Honest professionals in such regulatory authorities are often hounded out. The business cultures of many professional service companies – law firms, auditing firms and medical companies – have also begun to mirror the corrupt culture of the ANC and the state with whom they are doing business. Many professional firms, whether law, auditing or medical, argue that while government and everyone else behaves this way – corruptly, we better do the same; or face losing out on lucrative government contracts. There must be a change in professional firms’ focus on profits at all costs towards more balanced, ethical, and sustainable profit targets.
Given the systemic nature of corruption, professional associations must play a bigger role in holding their individual members and firms accountable for corrupt behaviour. They must also play a stronger role in ensuring the corporate cultures of professional firms are more ethical and the clients they take on are more balanced and caring. Civil society must play a more proactive role in ensuring public regulators are competently staffed and held publicly accountable for their lack of independent oversight over professions and firms.
Lack of merit, cadre deployment, and black economic empowerment for the ANC connected have undermined good moral values
The ANC government’s rejection of merit in appointments in the public sector, in its nomination of elected officials and distribution of government tenders, have poisoned society’s moral framework. Appointments to the public sector and SOEs are increasingly determined by the ANC deployment committees, who have only appointed ANC cadres who are deemed “loyal” to the party leadership or the dominant leading faction. In the public and SOE sector, ANC cadres can hardly be fired for incompetence, corruption, or wrongdoing if they are deemed loyal cadres.
This means that competency, talent, and honesty are not the overriding factors in appointments and tenders, but connectivity to the party, the leading party faction or the leadership are the most important criteria. The lack of merit in the public sector has not only led to mediocracy but has also undermined good moral values across society.
BEE companies owned by ANC cadres are often not appointed on merit either. In some cases, BEE companies are created by political capitalists, ANC leaders with no business experience whatsoever, but create companies specifically to bid for an upcoming government contract. These companies get critical government contracts to deliver public services like health, education, and infrastructure. They often inflate prices, buy the cheapest products, and cut corners – provide non-existing, shoddy services. This is one of the main reasons for the public service failures in government.
Alternatively, these politically connected “companies” partner with more established companies that have the capacity through the phenomenon of “fronting.” The politically connected BEE company would get the government contract and then outsource to the established local or international company. Increasingly, in the large BEE deals in the private sector, the ANC deployment committee have proposed that the “right” cadres or their politically connected BEE companies be empowered.
Private companies who do business with the government often also appoint connected ANC leaders or former leaders to the boards, not on merit but based on their networks in the ANC. Such ANC cadres on the board of private companies are often expected to “protect” the company’s contracts with the government, or mining licences.
ANC leaders have often sidelined anyone critical of party policies by not giving them public sector jobs or contracts. The private sector would also shun those deemed to be rejected by the ANC for fear of not getting government contracts if they appoint those blacklisted by the ANC. This means that a veil of silence has covered corruption – as no one wants to be seen speaking out or risk the ire of the ANC leadership. This is one of the reasons why state capture has taken place.
Misplaced racial, common past and ‘struggle’ solidarity undermines moral values
Misplaced racial, ethnic and ‘struggle’ solidarity to support individuals on solely on whether they are black or white, or from the same ethnic group, language or religion, no matter whether they are criminal, corrupt, or undemocratic, undermines a community or country’s good moral framework. Appeals to black (or white), ethnic, and struggle ‘authenticity’ often demand closing ranks behind very dubious and corrupt personalities, sometimes undemocratic politics and (black) government neglect of its (black) citizens.
For example, should the appointment of a black judge be applauded just because he or she is black, even though they act untransformed (Gumede 2019)? A case in point is the fact that in many rape judgements, and many black judges’ values were as conservative as some of their white colleagues. Many black and white judges and magistrates still astonishingly blame the victims of rapes for being responsible for being raped. Surely, in such cases, a black magistrate and judge cannot be supported merely based on their blackness, even if their judgements are blatantly against the letter of the Constitution.
It is crucial that we have the courage to point out when an unskilled or inexperienced black person is put in a position where they are not performing – rather than keep silent because at least they are black or white, are from the same ethnic background or have ‘struggle’ credentials. The poor ultimately pays the price for incompetence, corruption, and crime, whether it is white or black incompetence or corruption and crime.
Another case in point was pressure under the Thabo Mbeki presidency that everyone must rally behind Zimbabwe’s Robert Mugabe and the ruling Zanu-PF because of their ‘blackness’ and shared victims of racial oppression, ditto their terrifying oppression of ordinary black Zimbabweans themselves, let alone their looting of their country, while their own black citizens starve (Gumede 2005).
Former President Jacob Zuma was and still is fanatically supported for purely ethnic reasons. Zuma has, in his internal leadership campaigns in the ANC and in his attempts to stay out of jail on serious corruption charges, mobilised support on ethnic lines, appealing to Zulu speakers to support him based on his Zuluness alone. This has fueled tribalism’s flames, destabilising the ANC and South Africa.
Like so many African leaders who have mismanaged their countries, Zuma is also dogmatically supported by the very people who are suffering the most from the colossal destruction he unleashed on South Africa, whether through causing the failure of part of the state, bringing the economy to near-collapse, and pushing the country into lawlessness. The corruption, mismanagement, and incompetence under the leadership of Zuma have increased the poverty, inequality, and unemployment legacies of apartheid.
Because many South African and voters in many African countries mostly vote for parties and candidates based on their role in the struggle against colonialism, apartheid and white-minority regimes, ethnicity or colour, which undermines service delivery, they will never get the delivery they deserve (Gumede 2021c). In almost all cases, voting based on colour, ethnicity and past struggle credentials means that competence, performance in government in government and honesty, as criteria, for leadership and party election, are set aside by many voters.
This means that candidates and parties get elected who are often corrupt, incompetent and lack moral values – but they appeal to voters solely based on their anti-colonial and anti-apartheid struggle credentials, shared ethnicity or colour. Candidates and parties are elected based on past struggle credentials, ethnicity and colour; once elected to power, they often appoint officials to public services, state-owned enterprises (SOEs) and oversight agencies based on struggle credentials, ethnicity and colour, and not on merit.
Those who are appointed this way, again, have no incentive to be accountable for the effective delivery of public services to the public, as they know, that even if they fail in government, the voters will continue voting for governing party and leaders who are appointed, based solely on anti-colonial and anti-apartheid struggle credentials, shared ethnicity and colour, not on performance.
Unless voters change this anti-service delivery voting pattern, the cycle of non-delivery will continue. And corruption, poverty and social instability will continue to escalate. Continuing to vote for candidates and parties based on past struggle, credentials, ethnicity, and the colour is one of the main reasons why many African countries plunge into an ever-continuing downward spiral of lack of accountability that often ends in failed states, civil wars, and coups.
In many ethnically, language and colour diverse countries, with a historical past where one group dominated and others were subjected, both the former dominant voters and formerly oppressed voters often vote for candidates and parties that speak to their historically shared struggle, ethnicity and colour, rather than on their competence to deliver services.
Because of such voting, these countries also struggle to hold these governing parties and leaders accountable because they know that their traditional voters will continue to vote for them based on historically, ethnic or colour reasons – so they do not need to perform in government.
The World Bank, in its 2004 World Development Report, also pointed out that “where populations are polarised around nonservice issues—religious, ethnic, caste, or tribal background, for example—voters care more about what politicians promise on these polarising issues than on services, giving politicians incentives to pursue other goals at the cost of effective services”. The sad thing is, in such countries, where this is the case, after being elected, “politicians have neither the incentives nor the capacity to listen” (WDR 2004).
The American scholar of race Cornel West (1993), warns against the pitfalls of what he calls a resort to black ‘authenticity’ politics, whereby the issue is reduced to ‘racial reasoning’. He argues rightly that we must “replace racial reasoning with moral reasoning, to understand the black-freedom struggle not as an affair of skin pigmentation and racial phenotype but rather as a matter of ethical principles and wise politics”.
Failing African countries will only prosper on all fronts – better quality democracy, more efficient governments, booming economies, and more societal peace – when voters begin to elect and support candidates and parties based on merit, not based on colour, ethnicity or past struggle history. To get better service delivery outcomes, Africans will have to start voting more conscientiously, based on moral reasoning and on parties’ and leaders’ capability, performance, and honesty.
Lack of accountability at all levels
At the heart of the moral framework collapse is the stunning failure of democratic oversight institutions to hold the governing ANC, political and business leaders, and “trusted” professionals accountable. Lack of accountability at all levels of legislatures, government and oversight agencies is at the heart of persistent poor public services, financial mismanagement, and corruption. South Africa’s moral accountability system – all the institutions that are supposed to hold public, elected, and private leaders and organisations morally accountable are broken.
Accountability, in basic terms, means to accept and be held responsible for or to account for one’s actions (New Zealand Controller & Auditor-General 2016: 9). Enforcing accountability ensures that elected and public officials act in the interests of the country, not in their own or that of their parties.
Accountability lies at the heart of democratic government” (Guerin, McCrae, and Shepheard 2018: 10). The lack of accountability at all levels of legislatures, government and oversight agencies is at the heart of persistent poor public services, financial mismanagement, and corruption in South Africa.
Effective accountability requires a sound accountability ecosystem which involves legal reporting frameworks. These would include: effective internal government controls, processes and institutions; democratic oversight institutions, such as Parliament, the Auditor-General, the Public Protector and other Chapter 9 institutions; public access to information on state actions, decisions and use of public resources; non-state oversight institutions such as the media, civil society and ordinary citizens; and finally, consequences for wrongdoing. South Africa’s public accountability ecosystem is broken.
Year after year, the Auditor-General in audit reports bemoans the “lack of decisive leadership to address the lack of accountability by ensuring consequences against those who flouted basic processes.” ANC and government leaders have ignored the Auditor-General’s reports.
Former Public Protector Thuli Madonsela similarly exposed malfeasance by elected and public officials. For that, she was often attacked by ANC leaders.
The media, civil society organisations and whistle-blowers have consistently pointed out corruption, mismanagement, and poor public services. They have similarly also been dismissed. When ANC and government leaders fail to heed other watchdogs’ calls for accountability, the judiciary has often become the last resort for ordinary citizens to hold elected and public officials accountable. Astonishingly, President Cyril Ramaphosa (2021) told the Zondo Commission that he and the ANC leadership “was unaware” of the scale of corruption during his time as deputy president of the ANC and the country.
Throughout the Presidency of Jacob Zuma, Parliament had been ineffective in holding elected and public officials accountable. The ANC, as the majority party, appoints the majority members of Parliament, the pinnacle oversight institution. South Africa’s electoral system allows ANC leaders to handpick candidates for Parliament – who, in turn, is accountable to the party and leadership, not to their constituencies. This means that a corrupt ANC leadership can appoint corrupt members of Parliament.
Furthermore, the ANC also appoint almost every head of democratic oversight institution through deployment policy. Party leaders often appoint pliable, compromised, and corrupt individuals who will account for the leaders and the party, rather than the Constitution or the public interest. The deployment of such compromised individuals weakens the accountability ecosystem and democratic oversight checks and balances.
Alternatively, ANC members of Parliament, fearing recall by party leaders, will often look the other way rather than holding corrupt peers in the party, government, and public agencies accountable. Because the ANC has been so dominant because of its liberation movement legacy, corruption of its leadership, morals, and culture has also infected all the accountability oversight institutions.
To ensure accountability, Parliament must also follow up on whether the recommendations of inquiries, task teams and investigations are implemented. Importantly, Parliament should track the recommendations of the Zondo Commission to ensure they are implemented. There have been many inquiries, investigations and task teams into poor performance, mismanagement, and corruption, but changes are never made based on their recommendations. Parliament should allow follow-up on civil society, media, and citizens’ exposure to lack of delivery, mismanagement and corruption.
One reason for the lack of accountability is the lack of consequences for wrongdoing. There are no “heads must roll” culture when there is wrongdoing in the public service or among elected officials. Even if they perform poorly, many public servants and elected representatives stay on, have proven to be incompetent and steal public money.
Civil society organisations should, like the Organisation Undoing Tax Abuse (Outa) and SA Airways Pilots Association (Saapa) which lodged an application to the High Court in March 2017 to have former SAA chairwoman Dudu Myeni declared a delinquent director for her appallingly destructive mismanagement of the state airline, also hold other public officials accountable whom the ANC protects.
Of course, the ultimate accountability measure for a governing party is for citizens not to vote for it again if the party and leaders in government fail to deliver on their promises, become corrupt and are indifferent to the plight of ordinary citizens. Many South Africans still do not use their vote effectively to enforce accountability. Governing parties and leaders do not become more accountable, honest, or morally good unless they have a real prospect of losing power.
Corporate corruption is not seen as corruption
Business leaders are often critical of corruption in government circles; however, they abate corruption by colluding in corrupt practices: whether giving a kickback for securing a contract or appointing a token black or black politician to a board or senior position to secure access to government contracts.
A country’s political, business, and market culture also determine whether companies may be tempted to engage in corruption. In a country that is systemically corrupt, public and private sector companies will likely be more inclined to behave corruptly. In such countries behaving corruptly may be the norm. Companies may fear that if they do not pay bribes, for example, they lose their competitive advantage and will not get contracts. This is the so-called “prisoner’s dilemma”, in which the company that does not do bribery will lose out on contracts if every other company bribes in return for contracts (Poundstone 1992; Alexander and Plotkin 2013).
Business leaders often do not see corruption in a serious light. For one, collusion practices, where prices are fixed between companies to the detriment of poor consumers, are rarely seen by companies as corruption. Yet, corruption, as seen at Steinhoff, one of South Africa’s largest companies, which announced in December 2017 that it had committed “accounting irregularities”, is not an isolated incident but reflects a culture of systemic corruption within the private sector, similar to that of the public sector.
The rollcall of corruption in the private sector almost mimics that in the public sector. In 2017, three South African banks were implicated among 17 banking groups in collusion to price-fix the Rand after an investigation by the Competition Commission since 2015. In November 2017, the Department of Water Affairs and Sanitation revealed that 36 mines operate without water licences, violating the National Water Act, as they use water, waste and pollute without being monitored.
In five case studies completed by the Centre for Applied Legal Studies (CALS) at the University of the Witwatersrand in 2018 on mines ranging from platinum to coal found that very little of the social and labour plans mining companies signed up for were implemented. The CALS study found that mining companies have spectacularly failed to build houses, provide childcare and bursaries and provide training. In most cases, mine companies did not tell employees and local communities about their promised social and labour plan commitments. In 2013, 15 constructions agreed to pay fines totalling R1.4bn for collusive tendering related to constructions related to the 2010 Football World Cup. The companies had to sign an “integrity commitment” to ensure they would not be involved in future collusive or corrupt practices. In 2012, the Competition Commission announced that several fishing companies had admitted to price fixing of pelagic fish, which includes the three species of fish anchovy, pilchards, and red eye. In 2007, a number of bread companies, including Tiger Brands, were found guilty of fixing the bread price and milling costs. Six of South Africa’s leading milk producers were accused in 2006 of price fixing in a case that went on until 2011.
Corruption, ethical breaches and behaviour inconsistent with declared organisational values undermine the credibility, trust in and public approval, and ultimately the social licence of business. Corporate democratic citizenship, in essence, means companies that behave – pursue growth, profit and engage with their environment, stakeholders and society – according to the values of South Africa’s democratic Constitution.
A start is that whistle-blowers must be protected from harassment by companies in similarly that the German company Siemens, after its corruption scandal, introduced a policy that all whistle-blowers would henceforth be protected. It is crucial that in countries that are systemically corrupt that private companies come together to make collective agreements not to act corruptly – and for companies to stick to such agreements (Ostrom 1990; UNODC 2013b; Van den Assem 2012). Companies trading on government contracts should be compelled to adhere to a set of ‘integrity’ standards, in which they would foreswear corrupt activities. Civil society could monitor whether such companies adhere to these standards.
“Bling” culture has become the norm
With the corruption, breakdown or dismissal of all the guiding moral systems – Constitution, the ANC’s liberation ideology, African traditions, religious, professional ethics and communal moral values, a new ‘bling’ culture has, in many cases, replaced the void. When the new ANC leaders came to power, they inherited the trappings of state power left by the apartheid government: the state cars with bodyguards, villas, being waited on, free schooling for their children, free healthcare, free luxury travel and so on.
This ‘bling’ lifestyle appears to have become the new standard of achievement – a sign that one has made it. Individual worth is increasingly measured on whether one can afford the ‘bling’ lifestyle – not on one’s contribution to public service or doing the public good.
This is reinforced in the private sector, where the new black political elite looked to the lifestyles of the white business elite – which often mirrored that of the apartheid white political elite – as one to emulate to be ‘level’ with them. Also, for many, it does not matter how one achieves this lifestyle – whether through corruption, crime, cadre deployment or tenderpreneurs, as long as one acquires it. It appears that acquiring the means to live the ‘bling’ lifestyle gives one self-worth – and others bestow worth on one because of their ‘bling’ lifestyle.
The new emerging black business, who got rich through black economic empowerment, in reality, political capital,’ handed to them often not on merit, but on closeness to the ANC political leadership, have also emulated this ‘bling’ lifestyle behaviour. The peer pressure within black society to live up to this ‘bling’ lifestyle is immense, to show they have made it – Hollywood-style lavish weddings, parties, and bashes are now the currency.
Leaders drive cars worth millions. They wear watches and clothes worth as much as cars. They live in Beverly Hill-style mansions and drink expensive whiskies. The blue-light brigades, huge entourages and being treated as VIPs are an integral part of this bling culture. Ministers living in the most expensive hotels, holding conferences, and going on meaningless foreign junkets show precisely what this bling culture is about. This bling example set by the new black elite is sadly often seen as the new standard for many in the rest of society. The bonuses, perks and dizzy salaries state-owned companies pay their executives are part of this ‘bling’ culture. Leaders of breakaway parties from the ANC, such as the Economic Freedom Fighters, have mimicked the ‘bling’ live, with leader Julius Malema living it up in Ibiza, having champagne parties and driving expensive SUVs.
Some people who are not politically connected are prepared to circumvent the law and use shortcuts to ‘make’ it to a level where a bling lifestyle is possible. These shortcuts could mean attaching oneself to a sugar daddy or, in politics, to a political party boss or, in crime, to a crime boss. The more unfortunate who do not have the connections or looks try their luck, ‘tata ma chance’ style, by addictively playing the Lotto. They dream that one lucky draw will bring fabulous wealth. Others resort to crime to reach their dream of ‘bling’. Nobody has to work or study hard anymore. Everyone is looking for that shortcut.
Moreover, the idea of service is now a distant dream. Talent, skills, and hard work are no longer valued. This ‘bling’ culture encourages corruption and dishonesty and builds a society based mostly on patronage relationships. It corrupts our souls. In fact, it undermines all the values underpinning the liberation struggle. Gwede Mantashe, then the ANC general secretary, said: “the success of the liberation struggle was not to be measured ‘on how many billionaires we have produced, but rather how the poverty experienced by the majority of people was addressed.”
However, in July 2010, the ANC issued a statement saying those who criticise ministers spending millions on living at taxpayers’ expense in luxury hotels, while millions of those who elected them live in shacks, are unemployed and without food, were being “targeted”. “There is nothing immoral, illegal or unconstitutional in public representatives staying in (luxury) hotels, as this is not a breach of the Public Finance Management Act or the provisions of the Ministerial Handbook,” the late Jackson Mthembu, then ANC spokesperson, said.
The unintended consequences of the ANC’s deployment policy also help along this bling culture. Cosying up to the local ANC leadership can secure a lucrative ‘deployment’ to government, business or the party, a ticket to the ‘bling’ lifestyle. Praise-singing the leadership even if they are wrong, supporting actions that clearly go against prudent values, or self-censorship has now become the norm.
The consequences of this ‘bling’ lifestyle of the political elite for the state, society and individuals are devastating. Scarce finances and resources are being plundered. State capacity is being eroded – which means the ability to deliver essential services is declining. There is no room for entrepreneurship, innovation, and new ideas – absolutely necessary for economic prosperity.
This ‘bling’ culture has undermined South Africa’s productive capacity. We are ‘eating’, but we are not building any new factories or plants that can create jobs. This bling culture encouraged corruption and dishonesty and built a society based mostly on patronage relationships. It corrupts our souls.
Conclusion
Corruption has been normalised. The fragmentation of South Africa’s moral frameworks has helped to normalise corruption. Society will have to rebuild democratic moral values across all spheres. Merit has to be introduced in the public sector – rather than political connectedness, ‘struggle’ credentials and ethnic solidarity. Competency, talent, and honesty must become the overriding factors in public sector appointments and tenders. African traditions and religious traditions that undermine Constitutional moral values, individual dignity and rights must be abolished or reformed.
Racial, ethnic and ‘struggle’ solidarity to support individuals solely on whether they are black or white, or from the same ethnic group, language or religion, no matter whether they are criminal, corrupt, or undemocratic, should be replaced by moral solidarity – supporting leaders who are democratic, honest, and competent, no matter their colour, ethnic group, or faction.
South Africa will have to rid itself of the destructive bling culture, bling leadership and the hero-worship of bling. Corporate corruption must be taken more seriously. Companies must operate as democratic corporate citizens, which means that companies must pursue growth, profit and engage with their environment, stakeholders, and society – according to the values of South Africa’s democratic Constitution.
ANC members and supporters must hold their party accountable by not voting for corrupt leaders. If the ANC and its leaders continue to behave corruptly, ANC members and supporters must stop voting for the party and its leaders. All voters must stop voting for corrupt parties and leaders – which will bring the necessary accountability to tackle corruption. Crucially, the Constitution must be restored as the pinnacle moral system of the country.
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Since SOEs are taxpayer-funded companies, citizens should be seen as shareholders of these companies. When ordinary citizens, civil society, and consumers hold SOEs accountable as shareholders, they exercise active citizenship. Citizen shareholder activism is the missing link in holding runaway SOEs accountable.
Several private sector shareholder activists have taken on private companies regarding their corporate governance, remuneration, and environmental, social, and governance-related issues (Viviers 2017; Davids and Kitcat 2020). Theo Botha, the private sector shareholder activist, who regularly interrogates companies at annual general meetings about corporate governance, board compensation, and operational practices, provides an example to emulate in SOEs.
Several civil society organisations, such as Just Share and the Centre for Environmental Rights, have engaged private sector companies on environmental, social, and governance performance. Theo Botha and the Raith Foundation in 2019, at Standard Bank’s annual general meeting, asked for climate change resolutions to be adopted on the company’s assessment of greenhouse gas emissions in its financing portfolio and to adopt a policy on lending to coal mines and coal-fired power stations (Davids and Kitcat 2020).
In 2018, Theo Both and the Raith Foundation also joined forces to propose a resolution at the AGM of Sasol, asking the JSE-listed energy and chemical company to annual prepare reports about its plans to tack greenhouse emissions in SA. Sasol is one of the largest emitters of greenhouse emissions in SA. Sasol rejected the resolution.
However, South Africa does not have an extensive culture of citizen shareholders, civil society, and consumer activism holding SOEs accountable. Civil society organisations, the Organisation Undoing Tax Abuse (Outa) and SA Airways Pilots Association (Saapa) showed the way in citizen shareholder activism when they lodged an application to the High Court in March 2017 to have former SAA chairwoman Dudu Myeni declared a delinquent director for her appallingly destructive mismanagement of the state airline.
Myeni was subsequently declared a delinquent director by the North Gauteng High Court, unfit to operate as a company director. Sadly, these civil organisations had to seek help from the courts after the government lacked the political will to act against Myeni’s destruction of value, jobs, and services at SAA.
SOEs too critically important to escape citizen and civil society oversight
Corruption, incompetence, and mismanagement at Eskom, through the appointment of politically connected, incompetent executive and boards, the gifting of tenders to companies connected to the ANC, which either inflate prices or provide poor services, is responsible for the power outages which have wiped existing businesses, deterred new investments and led to capital and skills flight. The lack of housing, water delivery, and effective public transport is due to corruption, mismanagement, and incompetence at service delivery SOEs and has increased the poverty, inequality, and unemployment legacies of apartheid.
Chronic instability, incompetence, and corruption at the state-owned rail, port, and logistics state-owned companies have decayed South Africa’s rail, port, and logistics infrastructure into decay. Transport Minister Fikile Mbalula said corruption and incompetence at the Passenger Rail Association of SA had decimated the community rail stations, infrastructure, and trains.
SOEs guzzle up large amounts of scarce taxpayers’ money, with little returns, in terms of services, products, or profits. Conservative estimates showed that these entities’ appalling inefficiencies, waste, and corruption had sucked more than R1trillion taxpayers’ money alone in the past decade.
Public funds that disappeared into the black hole of SOE support are one of the reasons South Africa now is in such a financial crisis that it had to seek US$4.3bn from the International Monetary Fund to fund Covid-19-related reconstruction initiatives.
Malfunctioning SOEs have many opportunity costs incurred by not pursuing alternatives to these resource-sapping SOEs. Money is being diverted from essential public services such as education, health, and housing to SOEs, only to be flushed down the drain of incompetence, waste, and corruption.
SOEs crowd out the private sector, preventing entrepreneurs from starting businesses and creating new jobs and growth in the sectors dominated by these SOEs. They significantly contribute to rising taxes, ballooning public debt, and increasing public expenditure cuts on essential public services.
Last year, the Auditor-General reported that irregular expenditure in SOEs reached R100bn in the 2021 financial year. The top three contributors to irregular expenditure were Transnet (R56.3bn) and Eskom (R11.2bn), and the Airports Company South Africa (R600m). In that same financial year, 21 SOE entities, out of 55 large ones, declared to the Auditor-General, that they would not be able to continue as going concerns unless they were bailed out. These included Eskom, PetroSA, the Central Energy Fund, and the South African Broadcasting Corporation.
Last year, the 55 large SOEs ran a deficit of over R64.95bn – which the state had to provide through bailouts or guarantees. A few SOEs are either under business rescue or in provisional liquidation.
Government guarantees to SOE debt increased almost 300% from R129bn in 2019 to nearly R600bn by financial year-end 2020. The government’s rising exposure to SOE debt through its guarantees of SOEs debt has been a significant reason for the rapidly ballooning public debt. Debt servicing costs are the fastest growing expenditure item in the South African Budget. It is predicted to grow 16% per annum in the 2021-2023 Budget period, reaching 16.5% of total spending in the financial year thereafter.
Citizens and civil society need to influence SOE annual general meetings
All state-owned companies should have annual general meetings. This should be part of transparency, accountability, and good corporate governance. In its Guidelines on Corporate Governance in SOEs, the Organisation for Economic Co-operation and Development (OECD) said: “Ensuring a high quality of transparency and accountability is the very basis of any sound corporate governance regime. Information disclosure and higher standards of accountability in SOEs can contribute to improved efficiency and performance of SOEs” (OECD 2020: 13).
In Norway, for example, SOEs must strive to be as transparent as listed companies (OECD 2020). In general, “Information disclosure including both financial and nonfinancial data is essential for the government so that it can be an effective owner; the Parliament to evaluate the performance of the state as an owner; the media to raise awareness on SOE efficiency; and taxpayers and the general public to have a comprehensive picture of SOE performance” (OECD 2020: 13).
In practice, shareholders, stakeholders, and activists could challenge company strategy, ask questions about activities, and hold boards and management accountable at the AGMs of companies.
However, many South African SOEs do not organise AGMs. For another, SOE annual general meetings (AGMs) are generally secretive affairs; information about them is not widely publicised and not open to the public. This lack of transparency undermines good corporate governance and makes it difficult for citizens, civil society organisations, and stakeholders to access information about these entities to hold them accountable.
Even when AGMs have organised, the information from SOEs is usually poor. Last year, the Auditor-General said the financial records of SOEs are often so poor that in the previous financial year, 17 out of the 55 entities audited by the Auditor-General, financial records were so poor that they were unreliable for financial analysis.
Nevertheless, it should be mandatory for SOEs to have AGMs. Information about the AGMs should be widely publicly distributed. It must become mandatory for SOEs to open their AGMs to ordinary citizens, consumers, and civil society. As “shareholders”, by virtue of paying taxes, civil society organisations, consumers and ordinary citizens must become “activists” and attend SOE AGMs, and pressure the management of these organisations to govern ethically.
Citizens, consumers, and civil society organisations should be voting rights at SOE shareholder meetings. Citizen shareholder activists should take on SOE executives and boards at annual general meetings and hold them accountable for the entities’ performance, board and management remuneration and strategy.
Civil society and citizens should hold monitor SOE executive and board pay
SOE executives and boards receive huge remuneration packages and annual bonuses, yet these entities are loss-making, fail to deliver services and are frequently bailed out with public funds. The excessive remuneration of executives and board members of failing state-owned entities has not only given the managers in these organisations no incentives to become efficient, honest, and accountable but has added to the ballooning public debt burden.
The last SOE remuneration guidelines, only applicable to the remuneration of board members, were issued in 2007 before the 2007/2008 global financial crisis outbreak. Beyond these outdated guidelines, there is no other policy to oversee SOE executive and board remuneration, beyond the remuneration set by the entity’s board.
Although SOEs should, in theory, send their remuneration and incentives schemes for sign-off to the departments overseeing them, this rarely happens. Neither do SOEs send their remuneration policies to regulators or the National Treasury before implementation. In late 2019 Cabinet stated that future SOE remuneration and incentives schemes should be based on income statements rather than their balance sheets, which is currently the norm in most cases. This has not happened.
In 2016, executives of PetroSA, the state oil company, received R17.3m in bonuses, despite the organisation making an R14.bn loss that year. The former CEO of the Road Accident Fund was paid nearly R4million in the 2017/2018 financial year for working for three months of that year. He received an R2m performance bonus. That year, the RAF’s bank account had been attached by the Sheriff of the Court over R8bn of unpaid debts.
Eskom executives received massive bonuses during periods of financial failure and load shedding. As a case in point, in the 2010 financial year, Eskom executive directors received a 25% increase in remuneration to maintain adequate coal stockpiles and an uninterrupted electricity supply.
South Africa urgently needs a new, more sustainable SOE remuneration policy to guide executive and board remuneration. Such a remuneration policy must be based on performance rather than solely on a company’s balance sheet.
Many countries immediately after the 2007/2008 global financial crisis introduced pay limits for executives and boards of SOEs. Since the 2007/2008 global financial crisis, countries recently have introduced one of two kinds of reforms: capping executive and board pay at all entities; secondly, capping and cutting executive and board pay when companies make losses; and thirdly, cutting executive and board pay even when companies make profits.
In the private sector, activist shareholders have often successfully pushed for the rejection of extravagant executive and board remuneration. In 2020, Old Mutual and Shoprite, two Top 40 listed companies, saw shareholders vote against the remuneration of executives. Citizens, civil society, and consumers must similarly, at SOE annual general meetings, object to extravagant remuneration packages for executives of failing companies.
Remuneration and incentives for both boards and executives of SOEs should be made public. Citizens, civil society, and the media must object to extravagant remuneration packages for executives and board members of failing companies at SOE annual general meetings.
Civil society and citizens should get involved in board and executive appointments at SOEs
Incompetent boards and executives are among the significant reasons for SOEs’ failures. Appointments to boards and management are heavily politicised. The ANC’s deployment committees directly propose boards and CEOs for SOEs.
SOEs boards require the right people, with the right skills, at the right time. Both members should also add value to the business of an SOE (Christiansen 2014). Yet most SOE boards lack industry-appropriate skills, professionals, and demographic diversity. Politically exposed individuals are recycled from board to board, bringing failure to every board they are appointed to. Chapter 10, Section 195 of the Constitution clarifies that democratic values, fairness and competency should underpin public administration and must guide SOE appointments.
Through the deployment policy, the ANC leadership deployed cadres in crucial positions in SOEs, whether as CEOs or chairs of SOEs. Former Public Enterprises Minister Barbara Hogan, during her testimony at the Zondo commission last year, Hogan claimed that certain structures of the ANC saw themselves as having powers to make appointments in state-owned enterprises during Zuma’s tenure. Hogan claimed that former President Jacob Zuma insisted on installing executives with questionable backgrounds in SOEs and on their boards.
Appointments to SOE boards and managers are often opaque, shrouded in secrecy and appear not rational. There must be transparency and public and media access to information about the SOE board and management appointments. Potential conflicts of interest should be strictly policed. Civil society and citizens should monitor whether there are conflicts of interest among the SOE board and management members.
The constitutional requirement for fairness in appointments is mainly ignored in SOE appointments. With exceptions, there are few legal requirements for public participation in appointments to management and boards of SOEs. There are no standardised criteria for appointments, which results in poor-quality appointments.
For another, there is a concentration of power of appointments in the executive. Executive authorities (line ministries) have vast discretionary power over appointments. The president also has extraordinary massive powers to appoint, confirm or veto almost all CEOs and chairs of large SOEs. The president has a final sign-off on nearly all appointments.
Many countries have strict laws to limit the politicisation of SOE boards (Christiansen 2014). Civil society organisations and citizens should campaign for the depoliticisation of boards and management appointments.
Politicians should be barred from SOE board appointments. Civil servants who occupy full-time jobs in the public service should be banned from SOE board appointments. Politically exposed individuals should also be barred from boards. Civil society organisations should insist on public participation in SOE board appointments. In fact, civil society should push for legislation to make public participation in board appointments compulsory.
Civil society organisations should insist on regular lifestyle audits for SOE board members. There also must be regular assessment of the performance of SOE board members – and these must be made publicly available.
SOEs need the right people, with the right skills, at the right time. Civil society should actively nominate credible candidates for SOE boards and management appointments. There should be standardised rules for legibility for being SOE board members and for removing errant ones. Citizens and civil society organisations should insist that long lists of SOE board nominations be made publicly available; and that those rejected should be compared to those appointed to board positions.
There should be formal mechanisms for civil society and citizens to contest dodgy management and board appointments. Civil society and individual citizens should contest irregular board and executive appointments. Failing this, citizen shareholder activists should go to courts to challenge such poor SOE board appointments.
They must also target failing but politically connected board members for dismissal and have incompetent, corrupt and neglectful board members and executives declared delinquent, as Outa and (Saapa) did in the case of the SAA’s Myeni. Civil society organisations should draw up lists of compromised individuals who should be barred from SOE board and executive appointments.
Civil society and citizens should play a role in oversight of awarding of tenders
There must be greater public participation in the awarding of tenders by SOEs. All SOEs’ tender award deliberations should be in public. Citizens, civil society, and the media should sit in tender award decisions deliberations. There should be a consideration for citizen or civil society representatives to be part of tender award committees to see if these awards are fair.
Fake companies securing tenders from SOEs should also be exposed in public, in media, and courts. Citizens, civil society, and the media must work to get such companies blacklisted from tendering for government services. Most irregular spending, wasteful spending and corruption occur in the SOEs’ procurement system. Providing services for SOEs has become a lucrative arena for well-connected ANC cadres and the party. Cleaning up the procurement system of SOEs, which means income loss for many ANC-linked businesses and the party itself, will naturally be strongly resisted.
Former Passenger Rail Authority of South Africa (PRASA) chairperson Popo Molefe has alleged in court papers that the supplier of Prasa’s Afro 4000 locomotives had insisted that 10% of the tender’s value be paid to the ANC as a party. The ANC in the post-apartheid era also established Chancellor House, the investment arm of the ANC, secured significant stakes in government contracts, black economic empowerment deals and shareholdings in private companies doing business with the government.
Chancellor House’s bid for government tenders in partnership with private companies. For example, through its Chancellor House Trust, Chancellor House was gifted a 25% stake in Hitachi Power Africa, now Mitsubishi Hitachi Power Africa, which was awarded an R20 billion deal in 2005 to build all six boilers at Eskom’s Kusile and Medupi power stations. Chancellor House made a 5 000% return on its partnership with Hitachi.
In 2015, the US Securities and Exchange Commission (SEC) launched an investigation into Hitachi for its business partnership with the ANC’s Chancellor House, deeming it an irregularity. To stop the SEC investigating, Hitachi, in September 2015, offered to pay US$19m to the US regulator.
The Eskom power projects ran years late and billions of rands over budget – contributing to the power outages South Africa is experiencing, which has slashed growth, caused the closure of thousands of businesses, and plunged many into unemployment and poverty. According to the latest political party donor report by the Independent Electoral Commission, Chancellor House was the ANC’s biggest donor in 2021, donating R15m in August this year.
When a governing party has shares directly, through subsidiaries or trusts in a commercial company doing business with the state or exploiting natural resources, a conflict of interests may emerge where the company’s activities may be gone against the public interest. A governing party must always govern in the country’s interest, not in the interests of the party or its leaders, nor the interests of a third party; like a business, the party of its subsidiaries have shares in or from which commercial activities the party benefits.
Governing parties and their subsidiaries should not be allowed to do business in any form with the government entities they govern, whether at the national, provincial, or municipal level; neither should they be allowed to do commercial business with private companies. Civil society organisations should campaign to force the ANC and other parties not to have investment companies or tender for SOE contracts.
There have been several successful court applications of failing bidders challenging corrupt SOE tenders and have these awards set aside. Not only should falling bidders in rigged tender awards seek redress in court, but citizens, civil society and users or consumers should also take SOEs to court when they see that incompetent companies have been fraudulently awarded tenders to provide services and products. Civil society should also take corrupt SOE tenders to court.
Citizens, civil society, and consumers must hold SOEs accountable for service delivery
Citizens, consumers, and civil society organisations must also protest more about shabby services, products, and treatment by SOEs. Citizens who consume products and use services of SOEs must form consumer groups to pressure these entities to be more accountable. There is a solid case for SOEs delivering public services to have user forums, including customers, watchdogs, and community groups, to monitor the quality of services of these entities, whether they fulfil their social obligations and hold them accountable.
Many SOEs, such as Eskom, are monopolies in their sectors and, therefore, often do not care about providing quality services because there are no competitors to which customers could turn as alternative suppliers. Many SOEs’ arrogance, indifference, and callousness towards their customers, suppliers and stakeholders are astonishing. Because many SOEs are monopolies, with no competition, with captured customers, and assuming they will be bailed out when in trouble, they do not appear to care about service quality.
It should be compulsory for all SOEs to introduce citizen and consumer satisfaction surveys, and these results are made public. SOE employee performance should be measured partially based on the results of these citizen and consumer satisfaction surveys.
When Johannesburg City Power was formed as a ring-faced municipal SOE, there was a requirement that the entity establishes a User Forum – which had to include customers, civil watchdogs, and community groups, which could play an additional oversight role over the entity (City Power 2001). However, it never came to pass.
Nevertheless, establishing genuine Consumer and User Forums and Customer Charters, which involve customers, civil society and stakeholders, may help monitor whether SOEs fulfil their contractual, social and delivery obligations and hold them accountable.
In many countries, such as Canada, Singapore, and South Korea, SOEs must consult local communities before they embark on new projects in their areas. In South Africa, this is not the case. Citizens, local communities, and civil society organisations should insist they get consulted about and incorporate their concerns on new developments by SOEs in their areas.
Citizens, civil society, and media oversight over SOEs’ finances
Most SOEs’ financial management of assets, resources, and budgets are shockingly dire. Eskom has R450bn debt. Most SOEs post deficits. In the 2019/2020 financial year, Eskom posted a deficit of R20.5bn, PetroSA posted a deficit of R5.57bn, the SABC of R511m, and the Central Energy Fund of R334m. In the same financial year, at least 21 SOEs entities, out of 55 large ones, officially declared to the Auditor-General, that they would not be able to continue as going concerns this year unless they are bailed out (Auditor-General 2021). These included Eskom, PetroSA and the South African Broadcasting Corporation.
Furthermore, in the same financial year, the Auditor-General (2021) reported that the auditing of the finances of many SOEs could not be completed because their financial records were so poor. Out of the 55 entities, the financial statements of 17 were so poor that they were unreliable for financial analysis, including the Passenger Rail Agency of South Africa, responsible for passenger rail services.
Many SOEs repeatedly fail to complete their annual financial statements. In the Auditor-General’s 2018/2019 consolidated national and provincial audit, SAA, the South African Energy Corporation, for the second year in a row for that matter, and the Trans-Caledon Tunnel Authority failed to submit their financials. Citizen shareholders must push to have executives and boards fired for not returning their companies’ annual financial statements.
In April 2021, the Land Bank defaulted on R50bn of loan repayments; in June, it failed to make interest payments of nearly R120m. The National Treasury subsequently granted the Land Bank R3bn emergency equity funding.
Denel, the state defence firm, received R1.8bn as a bailout from the Treasury in 2019 and was promised another R576m in 2021, dedicated to debt payments. The SABC projected a shortfall of R1.5bn in revenue in the 2020/2021 financial year. The SABC was given an R3.2bn bailout in 2019/2020 on the condition that it meets certain conditions as part of a turnaround strategy. The Post Office expected a loss of over R1bn for the 2021 financial year. It has received R8bn in bailouts over the past four years.
A business rescue plan for SAA was estimated at around R40bn if it includes securing working capital, paying debtors and retrenchment costs. The Central Energy Fund, in a presentation to Parliament’s Portfolio Committee on Mineral Resources and Energy in 2021, said that to restructure PetroSA will need R15bn. The Central Energy Fund (CEF) itself has been on financial life-support. Several previous turnaround strategies of the CEF had failed dismally.
Many failing SOEs seeking public bailouts have had no turnaround plans. Others who have been bailed out on the basis that they would implement turnaround plans either did not have such plans and if they have, they were not implementing them. Continuing bailouts to failing SOEs without any turnaround conditions or enforcing these conditions will add to SA’s post-Covid-19 economic woes.
Citizens, civil society, and the media must monitor whether failing SOEs have turnaround plans, which should, at the minimum, include recruiting the best talent in the country on merit, changing their business model, getting rid of non-core assets and non-performing staff, tackling procurement corruption, and seeking strategic equity partners where possible.
Conclusion
South Africa’s failing SOEs are unlikely to become efficient, productive and have any developmental impact unless they are held as accountable to the public as listed companies are to their shareholders (OECD 2020). Civil society, citizens and consumers have an essential role as shareholders in holding SOEs accountable.
Citizen, civil society, community, and customer oversight are missing in holding SOEs accountable. Yet, without pressure from civil society, communities, and customers, it is doubtful that South Africa’s SOEs will become efficient, less corrupt, and more responsive. Given the lack of political will to turn around failing SOEs and the fact that they are likely to get more taxpayer-funded bailouts, citizen shareholders are absolutely crucial to holding these entities accountable.
References
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