07 October 2020

 

South Africa

Predictions

  • State capture inquiry will seek to assert itself through further arrests of low-level ANC members in coming months
  • Recent arrests reflect increased support for Ramaphosa’s anti-corruption agenda, but Zuma allies will continue to impede investigations and hearings
  • Progress on anti-corruption efforts will remain slow ensuring firms continue to face reputational risks from politically connected partners

 

Event

Three African National Congress (ANC) party members were arrested along with four of their business associates on 30 September, as part of the state capture inquiry’s investigation into the theft of public funds in 2014 by the human settlements department of Free State. The arrests were carried out by the Hawks, South Africa’s economic crime unit. Among those held was businessman and ANC benefactor Edwin Sodi, who testified before the state capture inquiry on 29 September that he had made large payments to many ANC members, including Health Minister Mkhize and ANC Treasurer General Paul Mashatile, between 2013 and 2019, but that he did not view these as “strange, fraudulent or as corrupt”.

Context

The Judicial Commission of Inquiry into Allegations of State Capture – known as the Zondo Commission, after its chairman Ray Zondo – was set up by President Cyril Ramaphosa in August 2018 to investigate public sector graft under his predecessor Jacob Zuma. Between 2008 and 2018 Zuma’s administration systematically weakened financial crime and law enforcement agencies, and watered down anti-corruption legislation, enabling widespread public sector corruption and theft of public funds. The former president and his allies have dismissed the Zondo Commission as politically motivated and a waste of taxpayers’ money. As of July it has cost USD 42 million, with little to show for itself. Nonetheless, a series of recent corruption scandals related to the procurement of goods and services for the government’s coronavirus (COVID-19) response has led to mounting popular pressure on Ramaphosa, explaining the timing of the recent arrests – the first by the Zondo Commission since…

South Africa: State capture inquiry will seek to assert itself through further arrests of low-level ANC members
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