The Stolen Billions: Imagine the suffering this money could have relieved

One and a half TRILLION Rand. That’s how much South Africa lost to corruption in just five years, from 2014 to 2019.

And yet, as eye-watering as that figure is, it’s only the proverbial tip of the ship-sinking iceberg formed by corruption, “irregular expenditure,” theft and general mismanagement that has characterised much of our country’s governance in the past 20 years.

Released by Unite 4 Mzansi - an initiative led by the South African Institute of Chartered Accountants (SAICA and business leaders – the figure was the result of a case study entitled State Capture 101. The organisation has since commissioned Stellenbosch University's Centre for Complex Systems in Transition to analyse more deeply how deep corruption actually runs in our country.

Because the concerning truth is, no one really knows. Accurately placing a value on the amount of money syphoned from public coffers over the years is nearly impossible, but, as the above figure shows, it’s an almost unimaginable sum.

Added to this are the multitude of additional consequences of years of neglect and mismanagement that have resulted in significant human suffering, not just financial loss:

• In 2023, the South Africa Reserve Bank estimated that relentless loadshedding and power outages caused by lack of transformer maintenance by local authorities cost our country R926 million a day. Yes, you read that correctly. Every. Single. Day. This put thousands of factories, companies and shops out of business, sending an untold number of people into unemployment.
• Richard Meissner, associate professor of politics at the University of South Africa (Unisa) in Pretoria, estimates that although South Africa has plenty of water and dams, 70 million litres of potable water are lost annually due to spillage from aging infrastructure that has seen little to no maintenance in recent years. This problem is exacerbated by a lack of key supply valves that has left large parts of our biggest cities without water for days at a time. Vandalism is also a significant issue. “Looters take everything from metal parts to pumps and then sell them off,” he says.
• A lack of maintenance in our wastewater treatment plans has resulted in discharges and leakages and discharges into waterways, which in turn contaminates rivers and beaches. Severe flooding in several provinces only serves to exacerbate the problem, with repairs to treatment plants taking months and even years to complete.
• A recent article by respected news agency Bloomberg reports that Johannesburg alone needs R221 billion to catch up on maintenance and overdue upgrades across its collapsing power, water and road networks. It goes on to say that even though the city has missed its annual target for water-infrastructure investment every year since at least 2008, and its electricity utility, City Power, has “urgent needs for upgrades and replacement to ensure network reliability and safety,” Johannesburg’s council recently imposed above-inflation increases for utilities and rates, and forced through a R2.5 billion loan from the Agence Francaise de Developpement despite objections from opposition parties.

And the hits just keep on coming.

A recent joint study by the World Bank and the Development Bank of Southern Africa (DBSA) revealed that South Africa as a whole needs to spend between R4.8 and R6.2 trillion Rand on transport, water and sanitation, basic education, and technical and vocational education and training between now and 2030 to close what’s known as the SDG (Sustainable Development Goals) gap in these areas.

Marie Francoise Marie-Nelly, World Bank Country Director for South Africa, says, “Infrastructure is required to support the progress towards the 2030 SDG agenda. Education, electricity, water and sanitation, and transport infrastructure are required to improve access to basic services and support inclusive economic growth.”

Boitumelo Mosako, Chief Executive Officer of the DBSA, agrees, saying, “Closing the SDG gap will require significant infrastructure and related spending.”

It’s important to note, though, that these recommendations come with a stark warning:

The study revealed that the poor quality and lack of management of infrastructure and services directly undermine the achievability of these SDGs. Any investment, therefore, needs to be supported by proper management, maintenance, and good governance.

Auditor-General Tsakani Maluleke admits, “Some of the biggest stumbling blocks are instability in administrative leadership at local government level and a lack of accountability for poor performance, including delayed investigations or disciplinary processes.”

She went on to say, “The local government environment is complex as it is riddled with instability at accounting officer level; repeated disclaimed audit opinions; municipal public accounts committees not always attending to matters such as non-compliance with legislation, procurement deviations and financial misconduct; disciplinary boards not always in place; and weakened institutions because of a steady breakdown in governance over several years.”

Until all these issues are addressed, any attempt to rectify the problems is futile and we’re we’re just continuing to throw good money after bad.

We all know how well that’s worked out for us so far.

I cannot be the only person feeling an immense sense of frustration, anger and injustice at the laundry list of infrastructural and service delivery failures plaguing our country that could have been addressed, if not in full, then at least to a significant degree, with the trillions of Rands that have found their way into back pockets instead of into council budgets to improve the lives of all South Africans.

There are, admittedly, occasional glimmers of hope, but forgive me if, given our woeful recent history, my optimism remains very guarded.

Earlier this year, for example, following similar legislation in the UK, it became a criminal offence in South Africa to “fail to prevent corruption.” The challenge as I see it now is how this new law will be implemented and enforced.

The new legislation forms part of South Africa’s Judicial Matters Amendment Act 2023 (JMMA), which received presidential assent on 3 April 2024, and the experts say it’s arguably the most important component of the JMMA.

And yet, unlike the UK, from where South Africa took inspiration, we don’t have a great track-record of prosecuting corporate bribery and corruption.

According to Transparency International, the UK ranks 20 out of 180 countries when it comes to effectively combatting corruption. South Africa lies 83rd. It’s not a stretch, then, to conclude that trying to apply the same legislation here as they have in the UK may not be the smartest move.

The fact remains that no matter how many “sound-good-on-paper” initiatives our government introduces, unless there’s a monumental shift in mindset, corruption by the few will continue to cause abject misery in the lives of the many.

A recent article in Engineering News quoted S&P Global Market Intelligence as saying, “South Africa will need to urgently address crippling infrastructure bottlenecks or risk derailing a budding economic recovery.”

Our own President has stated, “It is estimated that to achieve our infrastructure goals, we need an additional R1.6 trillion in public sector infrastructure investment and a further R3.2 trillion from the private sector by 2030.”

Yet, as a recent piece by Amnesty International points out, “In South Africa, 5.8% of the population pays about 92% of all personal income tax. This group is also paying about 85% of value-added tax. Together with the country’s already high indebtedness, this suggests limited options for generating additional resources.

“Concurrently, the government’s approach of implementing austerity has failed to curb the growth in debt as budgets have shrunk. On top of this, the revelation of extensive state corruption has impeded progress. It is clear that the lack of sufficient finance may simply be a symptom of the state of how South Africa’s institutions are managed and resourced.”

The bottom line is this:

Our country is haemorrhaging money thanks to virtually unchecked corruption, so where are the funds to fix everything going to come from? And how much good could already have been done with funds stolen to date?

It’s a question no one seems able – or willing – to answer.