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