I won’t lie. The headline shook me up a bit. It was on Bloomberg, the international business news service, and it blared: “South Africa is on the Road to Becoming a Failed State”.
The subheading to the article, which was carried in The Washington Post and other platforms on March 29, continued the story: “The euphoria in financial markets that accompanied Cyril Ramaphosa’s election victory in 2018 [sic] failed to account for the corruption and theft that have become the nation’s dominant post-apartheid leitmotifs.”
The author, Richard Cookson, is a former head of research and fund manager at Rubicon Fund Management. Previously, his bio said, he was chief investment officer at Citi Private Bank and head of asset allocation research at HSBC.
Now, many in the governing party will dismiss him as yet another negative, racist dog of international capital who never gave South Africa a chance anyway. The problem with that retort is that he is not the only one saying we are headed towards being classified a failed state. There is now a cacophony of voices uttering the expression “failed state” in relation to South Africa. When a powerful outlet like Bloomberg starts publishing regular articles (this isn’t the first) with those words embedded in them, that appellation begins to stick.
On Sunday City Press published a warning by professor Daniel Meyer, a development economist attached to the University of Johannesburg. Meyer said South Africa is a vulnerable state, but in seven years it could be a failed state, where the political and economic systems have weakened to such an extent that the government loses control.
Last week anti-apartheid activist and longtime friend of South Africa Lord Peter Hain also warned that the country is heading in the direction of a failed state. Hain told a PSG webinar that unless corruption is eradicated and incompetent officials are removed, the decline will continue.
With this exemption, malfeasance and corruption will be easily hidden for three sweet years of no scrutiny
This is now the story of South Africa on the international stage. In South Africa, the narrative is sadly becoming the same. In early March, Sibanye-Stillwater CEO Neal Froneman was asked about the social, policy and investment climate in South Africa. He replied: “My view is now that we are practically a failed state.”
Froneman follows in the footsteps of Bonang Mohale, chair of Business Unity South Africa, who said in February: “We are not a failing state, but a failed state.” In August last year, Mmusi Maimane told the Financial Times: “It’s an incompetent government leading a state that is about to fail.”
This week I began to wonder if we don’t deserve the appellation. In a country which faces a gargantuan corruption problem, why would a responsible government think that sweeping graft under the carpet is the best way to deal with it? At the weekend we learnt that finance minister Enoch Godongwana had granted the deeply corrupted and embattled Eskom exemption from provisions of the Public Finance Management Act. This means that Eskom will be allowed to exclude the particulars of irregular, wasteful and fruitless expenditure from its financial statements.
I don’t think you heard me. Eskom will be allowed to sweep all corrupt practices under the carpet. It will be under no obligation to report the corruption, which we know flourishes at power stations, and among its staff and contractors. Godongwana has exempted Eskom from reporting this corruption and mismanagement for the next three years.
Even the EFF condemned this, saying: “A decision to exempt an institution that is mired in corruption is … irrational and irresponsible because such a move will deepen and worsen the levels of corruption that define Eskom.”
Expenditure controls are woeful or nonexistent (think of the shocking overexpenditure on Kusile and Medupi power stations) at Eskom. Now, with this exemption, malfeasance and corruption will be easily hidden for three sweet years of no scrutiny.
When South Africa gained a reputation as a corrupt country in the 2010s, it was because Jacob Zuma had handed the country to the Gupta family. Now we are gaining a reputation as a failed state. That’s because instead of eradicating corruption, we officially try to hide it. Our actions are beginning to resemble those taken by the world’s worst.
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