Sovereign wealth fund would put graft over the top

WEALTH FUNDS

After all we’ve heard from the Zondo commission of inquiry into state capture, is the mining minister, Gwede Mantashe, serious about setting up a sovereign wealth fund?

Last week, I was scrolling through the news feed of a local publication. The headlines, in this order, were: “Can the NPA be revived?”; “An apolitical NPA needed”; “Failure to indict Jacob Zuma violated justice”; “The tragedy of the Zuma years”; and “Tainted cadres on ANC list”.

These disheartening gems were the first five articles. A bit further down was an article reporting that Mantashe had proposed setting up a sovereign wealth fund with the revenue from the gas find off the South African coast.

In the National Assembly he said that such a fund would “ensure the benefits of the discovery are preserved for future generations” and “help grow the economy”. He added that it “provides South Africa with a rare opportunity”.

The only response to this idea can be: “Mantashe, are you serious?”

As the various headlines demonstrate, our political hierarchy has proved beyond a shadow of a shadow of a shadow of a doubt that they cannot be trusted with large amounts of money.

Instead of providing South Africa with a rare opportunity, the establishment of a sovereign wealth fund would surely provide our future politicians with a rare opportunity to take corruption and looting to the next level.

Deputy President David Mabuza has described Eskom as “the main stage in the theatre of corruption”, but surely the parastatal would lose this title instantly if a sovereign wealth fund were established?

Under Jacob Zuma, Eskom’s debt exploded from about R40-billion to R420-billion and South Africa now spends roughly R1-billion a day in interest to keep the entity running and some form of electricity supply happening.

Ryan Ravens, the chief executive of business leadership organisation Accelerate, wrote in Business Day that the government has demonstrated that it “cannot be trusted to manage power generation infrastructure” in the future.

Although this is depressing, it is perhaps also true. And if it is true of Eskom, it must be doubly (or even more so) true of a sovereign wealth fund.

Norway’s sovereign wealth fund manages a mind-bending $1 000-billion. South Korea’s manages about $150-billion. Even Malaysia’s relatively modest sovereign wealth fund contains almost $40-billion. One can only imagine what future Guptas might do when presented with such an “opportunity”. Top of the to-do list would doubtless be a family compound covering the whole of Saxonwold, Westcliff and most of Parkhurst. Looting would be elevated to Olympic levels, and Brian Molefe’s pocket money allowance would probably run into the billions. On the downside, Cartier would need to open a minimum of six new stores in Sandton and the container port at Dubai harbour might become clogged with cargo ships laden with stolen cash. But surely that’s a small price to pay for an “opportunity” like this?

Future Zondo commissions would have their hands full conducting forensic audits of breathtaking scope as they traced the disappearance of sums so huge that mathematicians would need to invent new numbers to quantify them. And poor South Africans would end up even poorer than they are now.

So, although the idea of a sovereign wealth fund to develop our country is a nice one in principle, in practice it may not be the best idea we have had. Not by a long shot.

John Davenport is chief creative officer at advertising and communications company Havas. These are his own views 

PW Botha wagged his finger and banned us in 1988 but we stood firm. We built a reputation for fearless journalism, then, and now. Through these last 35 years, the Mail & Guardian has always been on the right side of history.

These days, we are on the trail of the merry band of corporates and politicians robbing South Africa of its own potential.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

John Davenport
John Davenport is the chief creative officer of Havas Southern Africa.
Advertisting

The rule of law in times of crisis: Covid-19 and...

Under a state of national disaster, some rights may be suspended. But it is critical to remember that the Constitution itself is not suspended

Test backlog skews SA’s corona stats

With thousands of samples still waiting to be processed, labs are racing to ramp up testing to help the government gain a better idea of how prevalent Covid-19 really is

Press Releases

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world

SAB Zenzele special AGM rescheduled to March 25 2020

New voting arrangements are being made to safeguard the health of shareholders

Dimension Data launches Saturday School in PE

The Gauteng Saturday School has produced a number of success stories