Fraud and Corruption in South Africa – What Have We Learned?

“We cannot prosecute our way out of corruption.”

Shamila Batohi (NPA) and Christopher Stone (Oxford University)

This quote from their 2023 paper, The World’s Anti-Corruption Efforts Need a Reset, sums up exactly where we’re going wrong in our efforts to fight fraud and corruption in South Africa.

We need to combat the grass roots behaviour that promotes corruption in our country if we are ever to stand a chance of winning this seemingly unwinnable war.

Collette Ashton, a researcher with the Institute for Security Studies (ISS) agrees, and her stance supports the position that we at JGL have always taken: Prevention, not reaction, must become the primary weapon in the fight against corruption.

“Prevention employs two methods to promote and maintain ethical values in organisations: data analysis and changing organisational culture,” she says.

Batohi and Stone concur, attributing much of the problem to the toxic culture they feel is pervasive in so many organisations.

“Bullying is a super-spreader of corruption,” they write. “Even carefully structured checks-and-balances, and the best designed rules, collapse in the face of a persistent bully in a senior role.

“Many ethical public servants ﬁnd themselves going along with corrupt schemes to stay clear of aggressive bullying from higherups or peers (or just to get away from them). They are not themselves corrupt, but they want to get on with their jobs without the hostility and stress that bullies sow.”

This is precisely why most anti-fraud and corruption measures put in place by government are ultimately destined to fail. Any if any agencies do start showing a measure of success, they are frequently – and often ruthlessly – attacked and/or destroyed by those elite and powerful members of society for whom the rule of law offers little or no benefit.

Systems theory describes corruption as a “wicked problem,” in other words, something obstinate, perverse, and complex enough to resist any attempt at resolution. One of the key issues in South Africa, of course, is that the people who benefit the most from corruption are usually extremely powerful. They have significant influence over the people we would usually look to, to solve the problem, such as the police, prosecutors and politicians. This means any attempt to prosecute them is weakened or rendered useless before it even starts.

No wonder then, that even with the recent introduction of several anti-corruption laws, bodies and other measures in South Africa, fraud and corruption continue to throttle our country.

Here are just some of the incidents making headlines in South Africa in 2024:

Numerous incidences of procurement irregularities within the OR Tambo District Municipality, including:

An investigation into a tender initially budgeted at R20 million but eventually awarded at R70.2 million to a company that was not the cheapest out of 10 bids received.
A contract of employment between the municipality and the winning bidder, resulting in the bidder having one employee permanently placed in the office of the municipal manager.
The same company using its service level agreement (SLA) to pay, among others, R2 million for a boxing tournament.
A municipal official received R120 000 from a service provider, and that same provider buying a car now being used by a municipal official.

The eThekwini Municipality is under investigation for

Maladministration in a R28.1-million contract awarded under its housing programme, including allegations that developers appointed by the municipality transferred or sold vacant properties for their own financial gain, and also paid “gratification” amounts to officials.

South African Football Association (Safa) president Danny Jordaan, together with former Safa chief financial officer Gronnie Hluyo and businessman Trevor Neethling, recently appeared at the Specialised Commercial Crimes Court in Palm Ridge on criminal charges relating to financial misconduct. These include using Safa funds to hire a private security firm and engage a public relations company (allegedly to protect his image following allegations of rape) without board approval.
Former Home Affairs adjudicator Phanuel Mokomo was recently found guilty of corruption by the Pretoria Specialised Commercial Crimes Court (he was found to have offered an internal investigator a R10 000 bribe to stop him from conducting a probe into his corrupt activities).
In a separate incident, no fewer than 18 Home Affairs officials were dismissed for a range of offences including irregular granting of ID documents, irregular possessing of passports and birth certificates, and sexual harassment.

There are, of course, many others I could mention, were it not for time and space constraints, but I’m sure you get the picture.

It’s a picture that, while bleak, offers the faintest of glimmers of hope for our country – at least some of the many kingpins of fraud and corruption activity in South Africa are finally being prosecuted for their offences.

It is, admittedly, the tip of the proverbial iceberg, and, as the opening quote of this article states, we can’t hope to eradicate corruption through prosecution alone. But it is, at least, a start, and it shows that, to some degree, we are starting to learn some hard lessons.

We’re learning that far more needs to be done on a proactive level to prevent corruption at its source, before it becomes a speeding bullet we have no hope of dodging.

The ISS suggests ways to successfully achieve this should include:

Strengthening existing anti-corruption institutions and creating incentives for cooperation between them.
Incremental innovations targeting one sector or body at a time.
Partnering with the private sector in collective action projects.

William Gumede, associate professor in the Witwatersrand University’s School of Governance, believes a large part of the problem in South Africa is that there is a cultural acceptance of incompetence and corruption, which erodes accountability.

Perhaps we can take inspiration and encouragement from initiatives such as Nigeria’s Maritime Anti-Corruption Network, which reduced corruption at the Lagos harbour by 96%. Its success is attributed to a committed collaboration between senior politicians and representatives from business and civil society collaborated to provide real-time consequences for bribery and build a culture of integrity in the port authority.

There is no doubt that South Africa’s response – or lack of – to corruption is likely one of the biggest determinants of the future success or failure of our country. We need to emulate international best practices, learn from the successes our African neighbours have achieved, and create a robust, bespoke plan of attack to eliminate corruption at its source once and for all.

Anything else will see us continuing to chase our tails in ever tighter and more futile circles.