Budgeting to fight corruption

Deep-rooted and wide-spread corruption has become commonplace in the public sector under the leadership of former president Jacob Zuma who himself is at the very centre of state capture allegations. (Elmond Jiyane)

Deep-rooted and wide-spread corruption has become commonplace in the public sector under the leadership of former president Jacob Zuma who himself is at the very centre of state capture allegations. (Elmond Jiyane)

Renewed vigour to tackle corruption head-on was palpable in National Treasury’s 2018 budget, tabled in parliament on Wednesday.

Deep-rooted and wide-spread corruption has become commonplace in the public sector under the leadership of former president Jacob Zuma who himself is at the very centre of state capture allegations.

In his budget speech minister of finance Malusi Gigaba said government has demonstrated its resolve to confront allegations of state capture and corruption through a judicial commission of inquiry announced by former President Zuma and the investigations being conducted by the Hawks Asset Forfeiture Unit and other agencies.

At a press briefing earlier on Wednesday Gigaba responded to questions about his own credibility given perceptions that he facilitated state capture in his previous roles as Public Enterprises and Home Affairs minister.

“We will all subject ourselves to the state capture commission,” he said. “The court of public opinion is not a court at all. What matters is that little thing called the facts and the truth.”

An investigation by the Public Protector as well as hundreds of leaked emails, dubbed the #Guptaleaks, show that state capture was funded through government procurement.

Treasury is now making a number of interventions to clamp down on corruption in this space.

“Treasury will increase collaboration with all law enforcement agencies to strengthen efforts to fight fraud, corruption and abuse of SCM (supply chain management) systems across all spheres of government in order to restore the integrity of supply chain management,” Gigaba said in his budget speech. 

“In recent years, a large number of deviations from normal procurement processes has reduced the credibility of the supply-chain management system. “Deviations can also result in anti-competitive practices that open the door to corruption, and which limit transformation by preventing small businesses from doing business with the state. In future, deviations will be allowed only in rare, well-justified cases.”

He noted that the Public Procurement Bill will be submitted to Cabinet in March 2018 for gazetting for public comments and also aims to improve governance as well as achieve efficiencies and enhance transformation. The department is also making proposals to amend the Public Audit Act in response to a worrying trend of rising unauthorised, irregular, fruitless and wasteful expenditure.

The state is also keen on addressing private sector corruption in light of the Steinhoff scandal where allegations of accounting fraud saw the share price tumble and wiped out billions in value for shareholders – including major pension funds.

Government regulators, namely, the Financial Services Board, Independent Regulatory Board of Auditor (IRBA) and other regulators have initiated investigations which are currently in progress and are working with overseas regulators to ensure that those at fault are made to account for their crimes, Gigaba said.

“It is vital that we subject corporate corruption to the same amount of scrutiny and ensure,among others, that we implement the IRBA recommendations on Mandatory Audit Firm Rotation in order to ensure the rigor of the audit process and independence of audit committees and firms.”

Lisa Steyn

Lisa Steyn

Lisa Steyn is a business reporter at the Mail & Guardian. She holds a master's degree in journalism and media studies from Wits University. Her areas of interest range from energy and mining to financial services and telecommunication. When she is not poring over annual reports, Lisa can usually be found pottering about the kitchen. Read more from Lisa Steyn

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