South Africa Investigates Alleged Corruption Exceeding $7 Billion in State-Owned Companies

According to a report released Tuesday by the national anti-corruption unit, South Africa is actively investigating alleged corruption totaling over $7 billion within several major state-owned enterprises. These investigations are not new; many have been ongoing since 2018 and were highlighted by the Special Investigative Unit (SIU) in a report to a parliamentary committee providing updates on their status.

The probes involve six key state-owned entities: Transnet (a ports and rail company), Denel (an arms manufacturer), Eskom (the national power utility), the National Lotteries Commission, South African Airways, and PRASA (the passenger rail agency).

At Transnet alone, around 60 suspicious contracts and numerous instances of conflict of interest amounting to nearly $4 billion of public funds are under scrutiny. Additionally, nearly 40 other investigations into alleged corruption involving various state-run businesses and government departments are ongoing, potentially involving billions more. Some investigations have already concluded and await public disclosure.

SIU Exposes Widespread Corruption Over 15 Years

The SIU’s findings shed light on the extensive corruption issues plaguing South Africa over the past 15 years. Allegations of widespread corruption emerged during the administration of former President Jacob Zuma, who governed from 2009 until his resignation in 2018 amid corruption claims. A judicial inquiry into high-level corruption during Zuma’s presidency implicated numerous government officials and executives at state-owned enterprises, who reportedly received kickbacks and bribes in exchange for lucrative government contracts. Despite these serious allegations, very few of those involved have faced criminal charges.

The corruption crisis has had a devastating impact on South Africa’s economy, particularly evident in the near collapse of its electricity supply due to mismanagement at Eskom. Last year, the country experienced unprecedented levels of blackouts, largely attributed to this crisis.

Currently, over 270 contracts at Eskom, valued at approximately $2.2 billion, are under investigation in a probe that has been ongoing for six years.

PRASA’s $540 Million Corruption Scandal

The SIU’s report suggests that approximately $540 million may have been lost to corruption at PRASA, including a scheme involving payments to over 1,200 non-existent “ghost employees.” One of the contracts under investigation, worth more than $300 million, dates back to the 2010 FIFA World Cup hosted by South Africa.

During Zuma’s presidency, the African National Congress (ANC) became synonymous with corruption allegations, and graft was a significant issue in this year’s national elections. The ANC lost its parliamentary majority for the first time since the end of apartheid in 1994.

Current President Cyril Ramaphosa has vowed to reform his party and government and hold those responsible accountable. However, experts in anti-corruption have expressed skepticism about the likelihood of recovering much of the lost funds.