Radical Economic Hypocrisy

The ANC leaders want you and me to believe that ‘white’ people, or rather ‘white’ companies are resisting economic transformation to redress apartheid-created racial inequalities in the country, hence their brand new slogan, radical economic transformation, which is seen as an ultimate solution to this apparent problem caused by white people and by implication the ANC is hapless or dis-empowered in the process to do anything about this seemingly huge ‘white’ problem except of course to spend millions of rand on white-owned advertising agencies to generate new slogans every five years before the next national elections.

If this was true, then why are the Director Generals and their ministers in government, and CEOs of various SOEs and their Boards of directors continuing to award huge tenders year after year to the very same ‘white’ companies they are telling you and me are the problem. It is, of course radical economic hypocrisy.

The state yearly spending has the largest ‘client base’ of both so-called local and foreign ‘white-owned’ companies such as Deloitte, KPMG, McKinsey and many others in all industries and government departments yet the same ANC leaders are calling for something called radical economic transformation. According to some local media, the auditing company, KPMG alone had 3,948 government-related projects over the past three years, earning it R1.732bn in total. In most instances, these ‘white’ companies do not have to compete openly for these huge amount of tenders to get them, Nor do they ever get humiliated by being told to get into a rotational tender queue or even carry insulting tag name such as tender-preneurs or receive late payments.

In contrast, when a black owned company received just a little over five tenders from state (not even a quarter of what KPMG or Deloitte received a week in tenders from the state), the ANC leaders in government are the ones who shouted on top of their voices for such a company to be barred from ever receiving any more tenders from government because it is allegedly corrupt. The ANC leaders in government got even more creative here by coining the term, tender-preneurs to embellish any black-owned company that dared to continuously receive five or so tenders from government. To demonstrate their power, given to them by black voters, the ANC leaders have even gone further to design a tender rotational policy for black companies stating that when a black-owned company receives a tender in a particular year or month, it must start on the bottom of the ever increasing long queue of black-owned companies looking for work from government to ever receive its second tender from the state.

As we rightfully point an angry finger to KPMG South Africa over the Gupta scandal, we must not lose sight of the real problem facing us, lest we perish our nation for many generations yet to be born.

For more than 20 years now the ANC has governed, or is it ruled, South Africa with astounding majority since they took power from the most brutal apartheid regime in 1994. In this period, the mismanagement of SOEs has had a dramatic negative impact on the South African economy due to the systemic nature of apartheid-style corruption that be-devilled them.

The ANC leaders/deployees in the state institutions across the three spheres of government are not just complicit in this looting of state funds; they are the true beneficiaries of a calculated crime against their own people. It is not possible for one to argue convincingly that when the Eskom Board of directors and their executives continuously paid millions of rand to a foreign company without following any proper procurement rules, some powerful white monopoly capital was at play forcing a helpless ANC government to just do as they were told. Remember this is not like we are asking the ANC to tell white companies how to run their own companies, which they can of course do through legislation to legitimately address the structural and social economic imbalances the country faces, but this time we are talking about the public sector where the ANC for over 20 years had a full majority to effect transformation and reverse apartheid economic discrimination within the black community in particular but they did not. Instead they chose to use this power to further empower the very white companies they are now telling you and me to hate for resisting economic transformation.

The state is the biggest buyer of goods and services in the country with spending power totaling over a trillion a year. If you do simple mathematics on this huge state buying-power for over 20 years, it is more than enough to have already significantly dented the apartheid economic deprivation of black economic status and to have even further addressed the social inequalities between whites and blacks in the country today.

The second and biggest problem after the ANC’s mismanagement of SOEs is the lack of a proactive oversight and regulatory system in the country both in the private and public sectors. Where were the usually revered King Reports when KPMG was going astray? Sleeping on the job?

If King Report after Report (I think we are now probably preparing Report number five of the series) could not help restrain the almighty KPMG executives’ culture from knowing where the true line of ethical leadership behaviour starts and ends, then God have mercy on all the poor small and emerging businesses in South Africa. The King reports series, now we all know, are hapless in curbing the KPMG culture of corruption that is at the heart of its DNA, not their so-called KPMG’s “True” Value methodology. Just as the ANC, now we all know, are miserable in curbing the Apartheid state culture of corruption that was at the heart of its DNA.

Does anyone know what the South Africa Institute of Chartered Accountants (SAICA) and Independent Regulatory Board of Auditors (IRBA) really do for a living?

Where was ICASA when SABC was going astray? Sleeping on the job?

Where was Nersa when Eskom suddenly started hiking electricity tariffs like mad and all that NERSA did was hold public hearing after public hearing? Is it not time to disband NERSA and perhaps get civil society organizations to hold these public hearings for us for free?

And where was SCOPA when SOEs were going astray? Was the long serving SCOPA Chairperson Themba Godi sleeping on the job because he could not afford to bite the hand that pays his salary? No wonder Thuli Madonsela and Mogoeng Mogoeng are the nation’s heroes and heroes for merely doing their jobs.

The absence of effective follow-through by oversight and regulatory bodies such as NERSA and SAICA for instance, can seem mundane and not worthy of their attention but it is almost never inconsequential. In the case of many of our SOEs, government did not appoint Boards that lead, and when governance systems collapsed, parliament finally recognized the Boards’ weak follow-through and belatedly tried to put out the fires.  SAICA and IRBA also suddenly woke up from their long slumber!

The responsibility to establish a climate of ethics and a culture of integrity for the SOE sector in South Africa falls squarely on the shoulders of the Board of directors and not just for them to monitor its management or stand guard over it. SOEs’ Board and oversight bodies have been too reactive, passive and accepting of what is proposed by the executive and toeing the political line of their political masters. And while the duties of proactive oversight have become more critical to the directors’ monitoring function, the additional responsibility of a duty of ethical leadership has become even more essential an element of good corporate governance as well.

By

Botshelo Wa Rakate
Director, Trueline Leadership Consulting