In October 2019, President Cyril Ramaphosa stated that “corruption has cost South Africa as much as R1 trillion”. This is a staggering amount of taxpayers’ money that was wasted, at a time when it is most needed.
According to the South African Revenue Service, of the R1,25 trillion it collected in the past tax year, the main source of revenue was personal income tax. Considering that 22 million South Africans collectively gave R528 billion of their hard-earned money to this proverbial pot, we must demand better outcomes or returns on our investment
The new auditor general, Tsakani Maluleke, released a press statement on 31 March 2021, calling on our government to “ensure sustainable audit outcomes”. In the 2019/2020 general report on national and provincial government spending, Maluleke emphasised that accountability failures must be dealt with more seriously. The same report states that irregular expenditure for the year amounted to R54,34 billion. This amount could be 31% higher because full amounts were not disclosed. Furthermore, it highlights that the year-end balance of irregular expenditure that had accumulated over many years and that have not yet been dealt with came to R262,03 billion.
Local government is another poor value for money entity. According to Statistics SA, South Africa has 257 municipalities, and in 2019/2020 they collectively spent R105,9 billion. Yet, according to the auditor general’s report for the same period, irregular expenditure amounted to R32 billion. This amount could also be higher since the full amounts were not disclosed.
This wasteful expenditure of our hard-earned money is the result of gross incompetence and is a crude violation of South Africa’s Freedom Charter. Because of this, daily, we witness the tragic effects of inequality, poverty, hunger, malnutrition and food insecurity. I remember the day we all voted in the first democratic elections in April 1994. Our vote not only meant that we were recognised as citizens, but we also placed our hope in the newly-elected ANC government – to ensure that they did what’s necessary to realise our hopes and dreams of a better South Africa for all.
Given that our economic outlook over the next few years does not inspire confidence and increasing taxes is not a viable option, our government must look inwards and constructively address the blatant disregard of our people’s money. They must use this money for our people. The cost of this ineptitude is incalculable. How do we quantify the impact of poor service delivery, our crumbling health system, the lack of infrastructure, our education system that is floundering and the lack of decent housing?
Testifying at the Zondo Commission of Inquiry at the end of April, President Ramaphosa said that “massive system failure” allowed state capture corruption to flourish in SA’s state-owned enterprises (SOEs) and that the “ANC is accused number 1 when it comes to corruption”. This is a sad indictment for a government that was chosen by the people for the people and it does not bode well for the constructive rebuilding of our fragile economy and for closing the huge inequality gap.
To accelerate prosecutions and the recovery of the proceeds of corruption, President Ramaphosa has several initiatives underway, including the establishment of a special tribunal. However, the legal process may take several years, resulting in a less than desirable success rate. We need decisive action now.
To help turn the tide, the following recommendations should be easy and fast to implement:
- Set stringent key performance indicators (KPIs) for senior government employees, with outcomes that are monitored quarterly.
- Discontinue cadre deployments and make appointment based on qualifications and relevant experience for senior government positions, including cabinet ministers.
- Implement stricter review / vetting processes of senior staff.
- Remunerate staff based on demonstrable outcomes, not passive tenure.
- Conduct quarterly audits to detect irregular expenditure early in local, provincial and national government departments.
- Include asset forfeiture and other severe penalties for government officials responsible for fruitless and wasteful expenditure.
- Meaningfully reward innovation, creativity and cost-saving strategies throughout the public service.
A streamlined and effective government that delivers value for money throughout the public sector will result in improved service delivery – health -, education, and housing outcomes for those who contribute to its purse and for those who can’t. When irregular spending is curtailed, funds could be directed to a Basic Income Grant (BIC) and use to incentivise non-profit organisations that demonstrate social impact, incubate social enterprises and support start-ups that show promise. When irregular spending is kept in check, we can realise a South Africa that benefits all our people.
Andy Du Plessis
Managing Director: FoodForward SA