News / South Africa

Makhosandile Zulu
3 minute read
20 Jul 2018
2:53 pm

Ramaphosa calls for recovery of billions siphoned out of SA corruptly

Makhosandile Zulu

The president says corruption must be dealt with decisively, even within the ANC's ranks, but he's also targeting illegal financial outflows.

President Cyril Ramaphosa at the ANC's provincial conference in Gauteng. Picture: ANA

ANC and state president Cyril Ramaphosa has called for billions of rands siphoned out of the country through corrupt activity to be recuperated.

Ramaphosa was addressing the ANC Gauteng provincial conference in Irene, Pretoria, on Friday.

The president said the party needed to demonstrate leadership to society by not tolerating and determinedly dealing with corruption, even within the organisation’s ranks.

“In fact, the nation now needs to move to another level of handling corruption. We must now embark on a massive project to get back the money that will have been stolen by those who were participating in corrupt activities,” Ramaphosa said.

He said billions of rands had also been siphoned out of the country, which should be recovered so that it could fund the health and education sectors in particular.

In 2014, after tracking illegal outflows from 2003 to 2012, the Global Financial Integrity (GFI) monitoring organisation estimated that South Africa lost about R147 billion a year to the illegal movement of money out of the country. Much of this was happening with the assistance of major “respectable” financial firms.

The Thabo Mbeki Foundation studied this problem and linked its origins to the 1960s, when many multinational corporations set up systems to move their profits offshore as a counter to the “threat of decolonisation”.

Profits from Africa have, over the decades, regularly moved to tax havens around the world through fake operations to hide the fact that taxes are owed to host countries.

According to journalist Sarah Evans, the “practice has become so common that at least one [unnamed] auditing firm released a tip sheet to its clients, mostly multinational corporations, to advise them on how to avoid paying taxes without alerting tax authorities”.

The GFI has estimated that developing countries lost $6.6 trillion (R88 trillion) in this way from 2003 to 2012. It continues to happen, relatively unchanged.

Ramaphosa’s record so far on fighting corruption

Ramaphosa’s interim administration – popularly dubbed the new dawn – was widely expected to redress alleged corruption and economic decline seen during the tenure of his predecessor, Jacob Zuma.

Following his ascension to the presidency in February, after Zuma was forced to step down by the governing party, Ramaphosa removed some ministers closely linked to his immediate successor, and who were implicated in alleged graft. However, some controversial ministers were kept in cabinet in the interests of party unity.

The ministers Ramaphosa dropped include some of those implicated in allegations of “state capture” such as former mineral resources minister Mosebenzi Zwane, former public enterprises minister Lynne Brown and former cooperative governance and traditional affairs minister Des van Rooyen.

The new dawn was also expected to see the purging of Gupta-linked individuals at state-owned entities Eskom, SAA, Transnet, Denel and others, some of which has happened.

Setting up commissions of inquiry, which includes the one into tax administration and governance at the South African Revenue Service and another into state capture, were seen as a positive move by the president.

Ramaphosa’s administration was commended by Kenyan scholar Professor Patrick Lumumba for ensuring Zuma faces corruption charges in court, the Daily Dispatch reports.

Lumumba was addressing the media ahead of his Nelson Mandela Lecture at the Walter Sisulu University in Mthatha on Tuesday.

Zuma and his son Duduzane have been dragged before the courts in separate incidents perceived as attempts at having the two answer to allegations of state capture.

Duduzane appeared at the Johannesburg Commercial Crimes Court this month on a charge of corruption and, as an alternative, conspiracy to commit corruption. He was released on R100 000 bail after he appeared in court shackled in leg irons; his case was postponed to January 24.

It is alleged the young Zuma aided the Gupta family in offering then deputy finance minister Mcebisi Jonas a bribe and the position of finance minister in 2015.

The former president is being charged with corruption, racketeering and tax evasion related to alleged corrupt dealings involving former financial adviser Schabir Shaik and French arms company Thint.

Zuma will be back in court on July 27.

For more news your way, download The Citizen’s app for iOS and Android.