Anatomy of a rot: Why South Africa is a ‘failing state’

African National Congress flag

A file photo of the flag of the African National Congress (ANC), South Africa's governing party. Most municipalities, all involved run by the ANC, were in a financial shambles.

Photo credit: Mujahid Safodien | AFP

What you need to know:


  • The daily and costly outages are threatening to become permanent as the power fleet, the average age of which is 47 years, becomes ever-more unstable. 
  • Only 16 percent of South Africa’s 257 municipalities obtained a clean audit in the 2020-21 financial year, with the overall standard of financial management having regressed in the past five years, Auditor-General Tsakani Maluleke found in her recent report.
  • So bad is the situation that the worst-performing and entirely dysfunctional municipalities, 33 in all, had been placed under administration after failing to meet their financial obligations and provide essential services.

Escalating daily power cuts, an economy that even in a commodity-friendly export market could do no better than stagger along, and a corrupt, faction-riven ruling party that seems hopelessly divided but determined to rule South Africa until, as former president Jacob Zuma said, “Jesus comes back again”.

These are some of the key components in the answer to the question, ‘What happened to Nelson Mandela’s Rainbow Nation?’

As the recently published fifth and final report of Chief Justice Raymond Zondo’s almost four-year-long probe into systemic corruption or ‘state capture’ makes clear, one succinct answer, encompassing all others, could be simply, ‘Jacob Zuma’.

But that is obviously a simplistic and inadequate answer, since Justice Zondo also squarely puts the blame for corruption and incompetence at all levels of government on the ruling African National Congress, (ANC) itself and its top leadership, including both Zuma and current President Cyril Ramaphosa. 

Ramaphosa drew criticism for “not doing enough” to stop whatever he knew was happening during his tenure as Zuma’s deputy between 2012 and 2018.

But Ramaphosa was also chair of the ANC’s ‘cadre deployment committee’, singled out by Zondo as the stem of the system of placing party loyalists in key jobs in government and state-owned enterprises (SOEs).

One current example is national power utility Eskom, still Africa’s largest producer of electricity, having been hamstrung by decades of maintenance neglect, mismanagement and outright thievery. It is in yet another round of ‘loadshedding’ outages and can barely keep the country’s lights on.

‘Rolling blackouts’ were first instituted in 2008, after a decade and a half of warnings that not enough maintenance was being done on SA’s large fleet of mostly coal-fired plants, but also of inadequate future build planning.

Since then, there have been repeated rounds of blackouts, the current one the most severe.

The daily and costly outages are threatening to become permanent as the power fleet, the average age of which is 47 years, becomes ever-more unstable. 

Zondo blamed the ANC and its leadership for this too, specifically pointing to cadre deployment and associated corrupt conduct.

Zondo called for the prosecution of those he named in his reports, and though some are still in high office, Ramaphosa promised to act, and a specialised unit has been appointed.

The Findings

Using Zondo’s harsh findings, the official opposition Democratic Alliance (DA) recently supplemented previously laid corruption charges against the ANC and its leadership.

Also using Zondo’s findings, on Monday, July 4, another opposition grouping, the Congress of the People (COPE), laid corruption charges against one of Zuma’s ministers, still a deputy minister in Ramaphosa’s cabinet.

Since early 2020 there have been arrests and graft-related court appearances of dozens of former officials of state or in state-owned enterprises (SOEs), along with some alleged private sector accomplices.

These steps, widely seen among SA’s hard-pressed and increasingly unhappy populace as moves ‘in the right direction’, are nevertheless far from adequate to address the corruption problem.

This is especially so at the local government level, where there is the most daily interface between the state and citizens.

Confirming the depth and extent of the cancer at the heart of the ruling party’s system of conflating party loyalty with state-paid plumb postings, the DA, having won a court order making the ANC’s internal records of its deployment committee public, has published an assessment of the damaging effects. 

The DA issued a statement after its court success earlier this year, saying it could “reveal damning new evidence that the ANC cadre deployment committee reserves certain positions on the boards of SOEs for party cronies whose CVs appear to be kept in a database separate from other applicants.

“This evidence, contained in meeting minutes of the ANC cadre deployment committee dating from between May and November 2018, provides the clearest proof yet that the capture of the state, to serve the interests of the ANC rather than the people of South Africa, continues unabated under the presidency of Cyril Ramaphosa,” added the DA.

“During meetings of the … committee on 11 May, 3 August and 26 November 2018, [it] reserved positions for ‘ANC cadres’ and ‘firm supporters of the ANC’ on the boards of (numerous) SOEs.

Ministers Implicated

“These SOEs included SANParks, which runs the country’s vast game reserves and national parks, the Small Enterprise Development Agency, the national rail freight mover Transnet, arms manufacturer Denel, the now defunct SA Airways, the SA Forestry Company, the Airports Company SA which runs the nation’s airports, the road agency SANRAL, and the National Advisory Council of Innovation.”

The DA says the minutes of the 11-member committee show that among those implicated are current ministers Pravin Gordhan, Blade Nzimande, Mmamoloko Kubayi-Ngubane and Lindiwe Zulu and former minister Edna Molewa.

All are said to be shown to be involved in explicitly reserving SOE board seats for the deployment committee’s allocation, although the official opposition party says it was “likely that board seats are similarly reserved for party cadres on boards across national government”.

In practical terms, there are other measures of the corrosive effects of this system, being near-terminal incapacity and vast graft at the local government level.

Only 16 percent of South Africa’s 257 municipalities obtained a clean audit in the 2020-21 financial year, with the overall standard of financial management having regressed in the past five years, Auditor-General Tsakani Maluleke found in her recent report.

Most municipalities, all involved run by the ANC, were in a financial shambles, she said.

A mere 41 municipalities received a clean audit (22 located in the Western Cape province, and DA-led or run), while 100 had “negative findings”, with 25 receiving disclaimers, meaning that their financial statements could not be relied upon.

Damning Report

Such a damning report, coming four years after a new administration promised to “sweep clean” and ensure competent, corruption-free government, especially at the local government level where it counts most, does not augur well for the ANC.

Said Maluleke: “Audit outcomes were in a bad state when the previous administration took over in 2016-17 and this state has not improved since then.”

So bad is the situation that the worst-performing and entirely dysfunctional municipalities, 33 in all, had been placed under administration after failing to meet their financial obligations and provide essential services.

Compared with the Zuma administration’s record, there was barely any improvement: 61 municipalities achieved a better outcome than in 2016-17, while 56 had a worse outcome, Maluleke said.

On the ‘up-side’, there was a small increase in clean audits, with 27 municipalities retaining theirs and with 14 more achieving that target for the first time, which, said the AG, was “encouraging”. But this was offset by six municipalities that had previously received clean audits having slipped back during that five-year period.

Not only that, but more municipalities submitted their financial statements late, which delayed auditing processes, while nine – seven from the Free State province where no municipalities received a clean audit – submitted none at all.

Seeing “no improvement” in accountability and transparency by municipal governments across the country, the AG is now using new powers to “propel people to act” by issuing “material irregularities” to municipalities with repeat disclaimers.

Debt Certificates

This means that “certificates of debt” had been issued to municipalities that had repeatedly ignored intervention from the AG, placing some of the cost of mismanagement and corruption at the feet of responsible officials.

The AG also referred “a number of cases” to SA’s Financial Information Centre and the top investigative police unit, the Hawks, to identify “where the (missing) money has gone”.

There was a downward spiral towards a “worsening culture of accountability” over the past five years in most regions dominated by ANC-controlled municipalities.

Adding another measure of the extent of the problem, the AG found that of the many billions paid by misconducting municipalities in cash, only 25 percent had credible paperwork, while some $220 million in “material irregularities” had been identified in 94 municipalities.

It was hoped that the AG’s move to make financial problems in repeat-offending municipalities the personal liabilities of municipal managers and other accountable officials, would help solve some of the problems in local government.

But as the ANC itself has admitted, there are still many people holding positions in local government especially – but also throughout the civil service and in SOEs – who are not qualified nor equipped to do their jobs.

The AG did not make the obvious link, but it is a well-known phenomenon that incapacity of officials has been directly correlated with corruption.

Given that before Covid-19’s advent, and again since tight restrictions have been lifted in recent months, there have been numerous daily incidents of protests over poor local government services like water, electricity, usable roads, refuse and sewage removal, the ANC is already on notice from a restive citizenry.

Last August, in local government elections, the ANC fell to below 50 percent overall support for the first time since the end of apartheid, losing control of several major metros and many smaller municipalities.

The next elections, in 2024, may on current trends see the ANC become a ruling party only by coalition, with factionalism, ‘careerism’ and ‘gatekeeping’ continuing to show the wider ‘state capture’ that the fusing of the ruling party’s and state interests has caused and sustained.

It may even be that if conditions do not improve materially, including the burning issue of reliable electricity, the ANC may find itself, like so many other African liberation movements, once heroic but in a mature post-colonial period rendered irrelevant, a ‘party of the past’. 

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