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The banking sector had issues with the Zuma administration because of the impact it had on growth the economy and the environment of banking in the country, Cas Coovadia, Managing Director of the Banking Association of South Africa, told CNBC Africa.

A new dawn for the banking sector – Cas Coovadia

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Adrian Saville, CEO, Cannon Asset Managers, talks to CNBC Africa about the essential differences between the two appearances by former President Jacob Zuma yesterday – the SABC interview early in the day and the resignation late at night.

Hard to reconcile Zuma’s SABC interview and the resignation speech

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It was inevitable for former President Jacob Zuma to resign, Dawie Roodt, Chief Economist of the Efficient Group told Fifi Peters this morning. Zuma found himself in a corner with no way out.

Zuma found himself backed into an inescapable corner

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Last night’s announcement of former President Jacob Zuma’s resignation did not lead the markets into mayhem. After weeks of uncertainty, the market had reached the point where it expected a when rather than a whether there would be a resignation. Jan

Late night for market watchers after Zuma’s resignation

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The Nigerian government recently announced that that it has begun investigations that involve under declaration of taxes by tax payers and corruption among tax officials.

Nigeria’s fight against tax evasion

*Story updated with emailed comment from Hogan Lovells
Lord Peter Hain who has made it his business to expose the Guptas and institutions he alleges assisted them capturing the South African state, accused Hogan Lovells on Monday during a speech to the House of Lords of &#8220;propping up state capture, corruption, cronyism and money laundering in South Africa.&#8221;
He also referred the international law firm headquartered in London, to the Solicitors Regulation Authority for allegedly enabling Jonas Makwakwa to return to his post as &#8220;second-in-command of the critically important South African Revenue Service (SARS)&#8221;.
Hain alleges Hogan Lovells spared what he alleges are &#8220;two of the most notorious perpetrators of state capture in South Africa – Tom Moyane, head of SARS and his deputy, Jonas Makwakwa – from accountability for their complicity in, and cover up of, serious financial crimes. In so doing, Hogan Lovells was complicit in undermining South Africa’s once revered tax-collection agency, and thereby effectively underpinning President Jacob Zuma and his business associates, the Gupta brothers and others, in perverting South Africa’s democracy, damaging its economy and robbing its taxpayers&#8221;.
Hogan Lovells describes Lord&#8217;s Hain&#8217;s accusations as unfounded &#8220;reflecting a lack of understanding of the work we were asked to carry out for the South African Revenue Service.  We are disappointed that he ignored the evidence which we provided to him and the other committee members earlier today. He did not contact us in advance of making his statement to the House of Lords and instead appears to have relied on inaccurate press reports in South Africa.”
 &#8220;We have fully reported the details of our engagement with SARS to the independent South African Parliament Standing Committee on Finance and we are very confident in its accuracy and probity.  Anyone who wants to take the time to understand our limited role in this matter can very easily read about it on the Parliament’s website or our own.” 
 “We have a fundamental duty to uphold the rule of law with integrity and professionalism, and have been strong advocates of that in South Africa. If Lord Hain does have evidence of corruption then that should be reported to the appropriate authorities in South Africa.  We look forward to working closely with the SRA on any complaint made to them by Lord Hain.”
Hain has called on the SRA to withdraw &#8220;Hogan Lovells’ authorisation as a recognised body; and to examine what other disciplinary action can be taken against its leading Partners including withdrawing their permission to practise as a solicitors&#8221;.
In a previous statement sent to CNBC Africa by SARS it expressed its deep concern at media reports spreading the allegation that there has been impropriety on the part ofMoyane in dealing with the disciplinary investigation into Chief Officer: Business &amp; Individual Taxes, Makwakwa.
In its statement SARS said: 
Firstly, it is not true that Hogan Lovells did not investigate the Financial Intelligence Centre (FIC) suspicious transactions. Neither is it true that Hogan Lovells issued a media statement to that effect.
All transactions as per the FIC suspicious report were put to Mr Makwakwa to respond and he did. It was those responses which lead to Hogan Lovells concluding that an act of misconduct could not be found from the transactions and their sources.
SARS wishes to assist with a factual and chronological account of events. Mr Moyane received the Financial Intelligence Centre (FIC) Report in May 2016.
After seeking advice, he placed Mr Makwakwa on precautionary suspension on 15 September 2016 so as to investigate whether or not any possible misconduct may have been committed by Mr Makwakwa relating to the FIC report.
The firm Hogan Lovells, an international and renowned law firm, was appointed to conduct this investigation.
In essence, their mandate which clearly reflects in their terms of reference was to determine whether any misconduct had been committed by Mr Makwakwa and/or Ms Kelly-Anne Elskie in their capacity as SARS employees.
Whilst on suspension, Mr Makwakwa committed what SARS believed to be a breach of his suspension conditions. This arose from a telephone call he made on 13 January 2017 to a SARS employee regarding an active tax matter.
On 20 January 2017, whilst the main investigation was still ongoing and whilst on suspension, disciplinary charges were served on Makwakwa relating solely to this breach of his suspension conditions.
Hogan Lovells concluded its investigation based on the mandate stated above and delivered an investigation report to Mr Moyane in June 2017. The Hogan Lovells report concluded that there was no prima facie evidence that Mr Makwakwa had committed any misconduct in relation to the financial transactions emanating from the FIC report.
However, the recommendation was that Mr Makwakwa be charged for violating the SARS Conflict of Interest disclosure provisions as well as the SARS Code of Conduct.
A decision was then taken to expand the existing charges already served on Mr Makwakwa in January 2017 to include charges relating to the allegation of non-disclosure.
Mr Moyane appointed Advocate Terry Motau, SC, a senior counsel from the Johannesburg Bar, to chair the disciplinary enquiry with the guidance and assistance of Hogan Lovells.
The expanded enquiry concluded on 15 August 2017 and the outcome was received from the chairperson on 13 October 2017.
Accordingly, Mr Makwakwa was found not guilty of all charges. Contrary to media reports spreading the allegation that the processes were tainted and that Mr Moyane had a hand in allegedly tainting the processes, the above clearly demonstrates a patently fair, unbiased and independent process.
SARS is concerned that wide spread media reports seem to suggest that SARS erred by allowing Mr Makwakwa back into his employ given that there is a criminal matter pending. This assertion displays a lack of understanding of the difference between a misconduct investigation by an employer and a criminal investigation.
It is common knowledge that FIC – not SARS – referred the matter to the South African Police Service for an investigation on possible criminal acts.
Thus in September 2016, upon enquiry, Mr Moyane was advised by the Directorate for Priority Crime Investigation (DPCI) that an enquiry into Mr Makwakwa and Ms Elskie, arising from the FIC report, was on-going under enquiry number 03/06/2016.
In law, disciplinary proceedings and criminal proceedings are distinct and are governed by different legislation.
As an employer, Mr Moyane’s jurisdiction only goes as far as determining whether or not there is any misconduct related to the employment relationship. The responsibility to pursue criminal charges in a court of law lies with the National Prosecuting Authority based on investigations by the SAPS or DPCI.
Given the outcome of the SARS disciplinary process and the fact that no decision had been taken by DPCI on whether or not Mr Makwakwa should be criminally prosecuted at that time, Mr Moyane was advised that there was no legal justification for SARS not to lift Mr Makwakwa&#8217;s suspension.
As a result, he was allowed to resume his duties with effect from 1 November 2017. Any other action would have amounted to a violation of Mr Makwakwa’s legal rights as an employee.
It is important to be aware that SARS’s rights have been reserved to initiate possible new internal disciplinary proceedings should the outcome of the criminal process dictate so.
SARS notes that the media reports seem to insinuate incorrectly that SARS has refused to release the report by Hogan Lovells.
Mr Moyane has sought legal guidance regarding the release of the FIC and Hogan Lovells investigation reports. The advice he has received suggests that a crime would be committed should these reports be made public.
Similar observations were made by the chairperson of Standing Committee of Finance (SCOF), Mr Yunus Carrim in his letter addressed to the Commissioner Moyane dated 6 November 2017, in which he noted the possibility that legal reasons may exist for the non-release of the reports.
To reach consensus and ensure closure on this matter, Mr Moyane has written to SCOF chairman Mr Carrim, making the following proposal:
* That a team consisting of legal representatives from SARS, the National Assembly, Treasury and FIC meet urgently to collectively engage and agree on a seasoned Senior Counsel to deliver an opinion on the legal permissibility of disclosing the reports
* That the National Assembly facilitate the process bearing in mind the urgency to get clarity on this matter.
The above detailed background and the process we are requesting of SCOF demonstrate our willing to always be transparent to the public so that we are forever beyond reproach.
In previous speeches Lord Hain has accused companies headquartered in the UK – including Bell Pottinger, KPMG, McKinsey, SAP, and banks such as HSBC, Standard Chartered and Baroda – of aiding and abetting money laundering, corruption and state capture in South Africa

Lord Hain accuses Hogan Lovells of propping up state capture

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Jannie Rossouw | University of the Witwatersrand
A corporate scandal unfolding around one of the largest businesses coming out of South Africa, Steinhoff, has become a major cause for concern. It threatens to wipe out hundreds of billions of rand invested on behalf of many people – rich as well as ordinary South Africans. Sibonelo Radebe asked Jannie Rossouw to interrogate the saga.
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What do you read from these allegations of corporate corruption?
The Steinhoff scandal is disturbing because it points to a serious gap in the checks and balances in the investment management space. A scandal of this magnitude should not have occurred if the systems with their multiple layers were working.
It’s still early days but it seems as if a multiple of highly paid professional layers failed investors. This includes auditors, asset managers and non executive directors who in their different roles should ensure that the company’s accounts are as close to the truth as possible.
Steinhoff share price collapsed by more than 90%, wiping off nearly €10 billion in shareholder value in about three days following the resignation of the company’s CEO, Markus Jooste, after news that German prosecutors were investigating the company for alleged massive accounting fraud. Steinhoff is listed on both the Johannesburg Stock Exchange and Frankfurt Stock Exchange.
Steinhoff shares were the darling of most fund and asset managers in South Africa and across the globe. We must ask questions why these entities, which draw enormous fees, failed to pick up the alleged irregularities when it seems like they should have done so if they were doing their jobs properly.
How big is the damage caused by this scandal?
It’s still early days but some people are already tagging this scandal as the biggest corporate failure in the history of the Johannesburg Stock Exchange. With more than 40 retailing brands in over 30 countries, Steinhoff was positioned as one of the largest companies by market capitalisation on the exchange. Its market value of close to R300 billion as recorded earlier this year placed it in the top 10, flanked by other South African corporate giants like media giant Naspers, luxury products specialist Richemont, resources giant Anglo American, petrochemicals firm Sasol as well as two big banks Standard Bank and Firstrand.
If Steinhoff’s stock doesn’t recover the capital losses of share investors who bought at inflated prices will be massive.
Steinhoff started off as a South African based company but built itself into a global retail business with significant interests in western Europe. As a result it attracted prominent investors. In South Africa, these include the Public Investment Corporation which invests on behalf of the Government Employees Pension Fund among other public entities. The Public Investment Corporation is reported to hold 10% of Steinhoff’s total shares which means its losses reached more than R10 billion after the share price collapsed.
It is therefore of the utmost importance and in the interest of all involved – particularly direct and indirect investors – that the Steinhoff matter be brought to a swift closure. Swift closure should be followed by legal action against and punishment of all those implicated.
How wide spread is such behaviour?
Each time a major scandal surfaces, regulatory gaps are identified and new measures are put in place to plug the apparent holes. But the scandals keep coming.
South Africa has had its fair share of corporate scandals with the most recent being a list of companies linked to the Gupta family inspired state capture. Big names like Naspers, KPMG, McKinsey and SAP have been caught in the extensive web of corruption allegedly driven by the Guptas who have close ties to the country’s president.
Some commentators have linked the Steinhoff saga to the broader ethical challenges facing South Africa. The integrity of some people in key positions of authority in both the public and private sectors is being questioned. This includes the country’s President Jacob Zuma who stands accused of violating the oath of office.
What must be done?
Despite the best efforts, it’s impossible to regulate for integrity and ethical behaviour. The one effective way that behaviour can be changed is through legal process and by means of tough punishment.
At this point in time we are still unsure of the degree of corporate rot in Steinhoff. Numerous allegations have been made, but the world now waits for the company’s delayed audit report to see the full extent of possible corporate fraud. Steinhoff must act swiftly in informing shareholders and other stakeholders about the true financial health of the company.
The Board of directors of Steinhoff is responsible for the financial health and the financial reporting of the company. The problems at the company resulting in the serious decline in the share price, raise the question whether the Board members should continue to hold office. Under the watch of the current Board a massive destruction in shareholder value took place.
No Board replacing the current one can do worse, as there is simply hardly any shareholder value left to destroy. Will the current Board do the honourable thing and step aside?
If fraud is proven, I want to see Steinhoff executives serve jail terms. They have caused immeasurable harm to many people. This is the only way in which unethical and fraudulent behaviour can be out-rooted and integrity restored.
From a proper investigation of the affairs of Steinhoff, possible regulatory gaps should also be identified and eradicated. Nevertheless, no structure of regulation and supervision can replace the single most important requirement for successful business conduct: Ethical behaviour. In South Africa we need ethical behaviour at all levels, namely the government, businesses and civil society.
<img loading="lazy" decoding="async" src="https://counter.theconversation.com/content/88905/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />The board of directors of Steinhoff is responsible for the financial health and the financial reporting of the company. The problems at the company resulting in the serious decline in the share price, raise the question whether the board members should continue to hold office. Under the watch of the current Board a massive destruction in shareholder value took place. 
No board replacing the current one can do worse, as there is simply hardly any shareholder value left to destroy. Will the current board do the honourable thing and step aside?
This article was originally published on The Conversation.

Op-Ed: Steinhoff scandal points to major gaps in stopping unethical corporate behaviour

Steven Friedman | University of Johannesburg
South Africans are fond of debating whether public or private sector failings are the bigger problem. It does not take too long to realise that they are really talking about race.
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This is evident as the country faces an unusual scandal – one involving a private company called Steinhoff. The multinational furniture company is in trouble after German investigators began looking into it, for allegedly doctoring financial information to mislead the markets.
This was not the first time fingers were pointed at a private company. Auditors KPMG have been accused of unethical practice on behalf of the Gupta family who are linked to President Jacob Zuma and are accused of using money to influence government appointments and policies. Media conglomerate Naspers is also facing corruption accusations. Its subsidiary MultiChoice is accused of paying large sums to the formerly Gupta-owned television channel ANN7 in the hope of influencing government decisions.
But Steinhoff stands out because it does most to shake the confidence of one side of the argument and to get the other claiming it is vindicated. 
For much of the past few years, corruption has been seen almost exclusively as a public sector problem. Attention has focused on Zuma and his relationship with the Guptas. The private sector (Gupta-owned firms excepted) has, by default, been painted as a corruption-free zone.
The KPMG and Naspers cases may involve prominent private firms, but are seen by the national debate as yet another sign of the Guptas’ baleful influence. The villains remain the same and so does the problem: public sector corruption.
Steinhoff is a different matter entirely. The state plays no role at all and the company is a pillar of the private economy. Its leadership is overwhelmingly white and its attitude to the post-apartheid government seems to range from indifference to scepticism.
No wonder that its failings have been gleefully seized upon by people who insist that private sector corruption is as big a problem as its public equivalent. Or that many of the people who usually insist that public corruption is the problem have reacted to Steinhoff with shock.
On the surface, this sounds like the standard debate in most democracies over the past few decades in which one side favours letting business do as it pleases and the other wants it to be reined in by the state. But, in a country in which whites remain dominant in private business while blacks largely control the government, it is really about the country’s racial divides.
<h2>Colour of merit</h2>
Apartheid was underpinned by strong beliefs in white superiority – these don’t simply melt away because political rules change. People are used to seeing one racial group in skilled jobs, giving orders to the other: inevitably, this becomes seen as natural and so being white is associated with merit, being black with lacking it.
Since 1994, when policies promoting black advancement in business and the professions were adopted, this is often expressed in the view that black people in senior positions are there because they were given a free pass by the system, not because they deserve it.
This way of thinking also shapes attitudes to government and business. For those used to the racial pecking order of the past, government is run by people who hold posts because they are black, not because they are competent. Business continues to be run mainly by people who were judged to be competent in the past and who are therefore assumed now to be honest and to know what they are doing. Calls to assign more government functions to businesses or business people are often a way of saying that white people or black people approved by them should be running the country.
This attitude is particularly evident in how people in the suburbs react to private monopolies or dominant corporations.
Government departments are almost always associated with waiting in long lines for surly officials who have no idea what they are doing. In most cases, this is a caricature; in some, the Department of Home Affairs passport office for example, it is flat wrong. But similar long waits, indifference to customers and incompetence at the dominant digital television corporation or one of the mobile phone companies is accepted cheerfully as normal business practice.
<h2>Delighted black voices</h2>
Black people are perfectly well aware of these attitudes. This is why those who insist that the private sector is as bad if not worse than its public equivalent are almost always black. And why many black voices are delighted at what has happened at Steinhoff because it shows that a pillar of white business can behave at least as badly as black government.
It also explains why many white people have reacted to Steinhoff with such shock – and why Steinhoff happened in the first place.
The editor of the country’s leading business daily, Tim Cohen, has pointed out that Steinhoff’s failings should not have been a surprise since several market analysts warned a while ago that something was amiss and were ignored. He offered some explanations but, given the realities described here, the most likely answer is that no-one believed the specialist nay-sayers because they assumed that a major white-owned company must know what it is doing and that the critics must have an axe to grind.
Cohen also ran into trouble on social media for suggesting that reduced capacity at state regulators allowed Steinhoff to happen. Predictably, black people felt (wrongly in his view) that they were being blamed for white business failings.
There is another explanation for the regulators’ inaction. It is that they were not eager to look into a large white-owned company because they feared that this would be seen as yet another case in which incompetent black people wanted to bully competent whites. It is standard in the South African debate that any attempt by government, however mild, to intervene in business is branded a threat to the market economy so it would hardly be surprising if regulators feared this.
<h2>Correcting wrong perceptions</h2>
The Steinhoff scandal would do South Africa a huge service if it made the point that corruption and mismanagement have nothing to do with race. It would also help if it alerted everyone in the marketplace to watch as carefully over private companies as they do over government departments.
<img loading="lazy" decoding="async" src="https://counter.theconversation.com/content/89037/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />But, given how entrenched racial attitudes are, it is more likely that it will be dismissed as a once-off freak by those who assume that white led business is always competent and as further evidence of white prejudice by black people reacting to the label often stuck to them. If that happens, some private businesses will continue to get away with behaviour which would never be tolerated in government.
This article was originally published on The Conversation.

South Africa’s race relations laid bare in Steinhoff corporate scandal

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South Africa appears to have an endemic problem with corruption. Just this week Steinhoff has come under the spotlight and last week Naspers.

State capture is an elitist conversation – survey

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South Africa appears to have an endemic problem with corruption. Just this week Steinhoff has come under the spotlight and last week Naspers.

Most S.Africans are willing to fight corruption than racism – survey

Tahiru Azaaviele Liedong, University of Bath
In 2002, the African Union reported that Africa lost about USD$148 billion through corruption every year. This represented 25% of the continent’s combined GDP at the time. Nothing much has changed.
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Last year, the global business advisory firm KPMG estimated that if South Africa reduced its corruption by one point, as measured by Transparency International’s corruption perception index, it could add R23 billion to its GDP.
The thrust of these facts is that the lost monies could have been used to finance institutional development and reduce the constraints to doing business in Africa.
In spite of the effects of corruption on the private sector, businesses in Africa are relatively silent about the menace. Efforts to combat corruption are largely championed by civil service, non-governmental organisations and international development agencies.
A new study has linked the private sector’s silence to the inadequacy of business education in the region. It notes that business schools can play a vital role in the fight against corruption. They can do this by nurturing business students to become institutional entrepreneurs – people who will bring about institutional change – not only in Africa’s economic domain, but also in the political arena.
Schools can equip students and managers with knowledge and expertise to advocate for public accountability and good governance, as advocated by the World Economic Forum.
<h2>Why the private sector is silent</h2>
There are several reasons why private companies often remain silent about corruption. One is that some of them indulge in and benefit from corruption.
In Ghana, for example, a “create-loot-share” model of corruption persists. Politicians, public officers and businesses collude to create and profit from fraudulent acts, including inflated contracts. This is also common in Nigeria, where between 2009 and 2014, about USD$2 billion was salvaged from inflated contracts by the government agency set up to vet procurement.
Even multinational companies from the least corrupt countries gain from Africa’s corrupt political elite. For example, in 2011, UK’s Shell and Italy’s ENI paid USD$1.1 billion to Nigerian officials for access to an oilfield currently worth USD$500 billion. US tyre firm Goodyear paid more than USD$3.2 million in bribes to Angolan and Kenyan government officials in order to win supply contracts.
The pressure on companies to indulge in corruption is considerable in Africa. According to data from the World Bank, 71% of enterprises in Sierra Leone, 66.2% in Tanzania, 64% in Angola, 75.2% in Congo and 63% in Mali expect to give “gifts” to secure government contracts.
The ethical dilemma for business managers is that refusing to pay bribes can cost their companies contracts, licences and revenues. Essentially, good companies which do not yield to extortion may lose out to bad competitors who do. Consequently, most companies yield to corruption or stay silent. Speaking up can make them targets for political witch hunts and discrimination.
A much deeper reason for the private sector’s inactivity is that managers simply lack the political skills required to shape their business environments. This deficiency arises because the link between political institutions and economic markets has not received adequate attention in business schools. So the schools are turning out managers with good knowledge of business but inadequate understanding of public governance and inability to influence public institutions.
Most people, including business managers, feel powerless when dealing with corrupt government officials. They regard official institutions as too powerful to take on and see corrupt practices, such as bribery, as unchangeable. But with good education and training, this can change.
<h2>African business schools can help</h2>
Corruption is multi-faceted. So there is no simple solution for it. It must be battled on all fronts. Business schools can do their part by developing competence to confront corruption.
Some in Africa have already done so: three business schools introduced an anti-corruption programme sanctioned by the United Nations into their classrooms.
But much more can be done. Business schools should teach business-government relations, or corporate political activity. This is crucial because many business managers don’t know how to influence their political environments even though they are affected by government policies. Students and managers may be taught ethics in schools, but ethical values are difficult to uphold in contexts where corruption is highly endemic, such as Africa.
If the fight against corruption in Africa is to succeed, business managers must learn to engage public officers differently. The ability to do this can be developed in business schools.
Students and managers need to learn about political strategies that can change the way institutions work. Techniques for ad hoc management of bribery are no longer enough. Companies can, for example, present a united front against corruption so that none can be singled out for “punishment”.
The business community could also learn to self regulate by refusing to deal with corrupt companies, as was recently reported in South Africa. Collective campaigns for public procurement transparency can also prevent politicians from using the private sector to plunder State funds. Inaction breeds corruption, as seen in Kenya’s USD$1 billion Anglo Leasing scandal.<img loading="lazy" decoding="async" src="https://counter.theconversation.com/content/87405/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />African business schools are valuable in the fight against corruption. They can take bold steps to review their curricula and promote active corporate citizenship. When they see what a difference they can make, the continent may begin to shake off a major hindrance to its development.
This article was originally published on The Conversation.

Business schools have a role to play in fighting corruption in Africa

South African President Jacob Zuma reiterated a call on Monday for radical reforms to shift the balance of “monopoly” economic power away from whites who dominated under apartheid, saying without such change blacks would stay poor for a long time.
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He made the remarks, reiterating a staple criticism leveled by his ruling ANC about South Africa’s economy, against the backdrop of widespread allegations of corruption against Zuma and his friends, the Indian-born Gupta brothers.
Zuma was responding to a question about his role as an enemy of “white capital”, during an interview with the ANN7 news network, which was founded by the Guptas. Zuma and the Guptas have denied any wrongdoing.
“I don’t know why there is a debate in fact. Because there is a monopoly capital and in South Africa it is white &#8230; because of our history, it does have a color. It is white,” Zuma, who steps down as head of the ANC in December but can remain head of state until elections due in 2019, said.
“Companies that dominate in the mines, there are not many &#8230; You will find the same companies in charge. That means they are monopolizing the economy and they’re not black,” he said.
The Chamber of Mines in the world’s top platinum producer says that in 2016, 39 percent of the sector was owned by “historically disadvantaged South Africans” &#8211; meaning non-whites.
Zuma said the policy of “radical economic transformation,” which has also seen moves to change the constitution to allow for the expropriation of land for redistribution to landless blacks, was needed to “correct the past.”
“The ANC must follow this policy because if you don‘t, we are going to stay in poverty, in inequality, for a long time.”
The frontrunners to replace Zuma at the helm of the ANC are Deputy President Cyril Ramaphosa, a trade unionist who amassed a fortune in the world of business, and Nkosazana Dlamini-Zuma, former chair of the African Union and Zuma’s ex-wife.
Ramaphosa is viewed more favourably by foreign investors, who help cover the country’s deficits. Many of them are unsettled by Dlamini-Zuma’s calls to radically redistribute wealth and her perceived links to her former husband.
In a separate interview on state broadcaster SABC, ANC Secretary General Gwede Mantashe said “state capture is a reality,” referring to allegations that the Guptas and others have undue political influence with access to state resources and contracts under Zuma.
Mantashe is regarded as an ally of Ramaphosa with ties that go back to the 1980s when they were involved in the founding of the National Union of Mineworkers.
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Reporting by Ed Stoddard, Editing by William Maclean
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South Africa’s Zuma again denounces “monopoly” white economic power

South Africa’s scandal-plagued power utility Eskom said on Monday it was not insolvent but was facing serious liquidity issues and would be in “trouble” if the situation persisted.
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Eskom, the sole power supplier in Africa’s most industrialised economy, is also in midst of leadership crisis and has been at the heart of allegations of illegal contracts and undue influence in awarding tenders to the Gupta family, friends of President Jacob Zuma.
Zuma and the Guptas have denied any wrongdoing.
Eskom spokesman Khulu Phasiwe said the firm’s sales growth had been muted while its operating cost were very high and its tariff for the current financial year were low.
“We are not insolvent but we are projecting that if we continue along this trajectory we might be in trouble,” Eskom spokesman Khulu Phasiwe told Reuters.
“We as company we need to sort ourselves out and get our house in order so that when we go out to the market to raise money these things do not become a hindrance,” said Phasiwe.
Online publication Fin24 and EE Publishers on Monday said the utility’s liquidity reserves are expected to fall to 1.2 billion rand ($82.65 million) by the end of November compared to a target of 20 billion rand.
In its annual results for the financial year ended in March the utility reported a score of losses, saying it expected cash and cash equivalents to fall 8.6 billion rand ($598 million) to 20.4 billion rand.
($1 = 14.5198 rand)
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Reporting by Tanisha Heiberg and Mfuneko Toyana; Editing by James Macharia
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South Africa’s Eskom not insolvent but facing cashflow trouble

Keith Gottschalk | University of the Western Cape
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South Africa’s nuclear build programme seems to be back on the agenda after earlier indications that it was dead. Recent comments by President Jacob Zuma and his new minister of energy David Mahlobo, signal a final push to bag the nuclear deal while Zuma is still in power. In December Zuma’s term as president of the African National Congress will come to an end when the ruling party elects a new leadership. His term as president of the country ends in 2019. The Conversation Africa’s Business and Economy Editor, Sibonelo Radebe, asked Keith Gottschalk to assess the situation.
<img loading="lazy" decoding="async" class="aligncenter wp-image-290229 size-full" src="http://cnbc.africa/wp-content/uploads/2017/11/Nuclear-Pixabay.jpg" alt="" width="960" height="715" />
Is it still possible for the Zuma administration to bag the nuclear energy programme?
The worsening financial plight of the state and its parastatals makes the estimated R1 trillion rand cost of the proposed nuclear build programme increasingly unaffordable. The new Finance Minister Malusi Gigaba said as much. Slow economic activity is squeezing the tax revenue base while social expenditure demands keep rising. This has caused the deficit indicators to rise a cause for serious concern. Its ludicrous for government to insist on adding the humongous nuclear build programme into such dire state of public finances.
It’s also important to consider that government’s atomic ambitions go far beyond the 9 600 MW of extra nuclear power stations. It also wants to rebuild a uranium enrichment plant that dates back to former apartheid-era President PW Botha in the 1980’s. South Africa gave up its nuclear capability in 1989. It was the only country in Africa that had the ability to make a nuclear bomb.
Zuma’s administration wants to regain some of the lost nuclear capacity. It wants to construct a fuel element fabrication factory. It has talked of a nuclear fuel reprocessing plant. All these also bear steep price tags.
What can stop it?
It’s been reported that Mahlobo, the former state security minister turned energy minister, wants to rush through the new process of guiding the nuclear energy plan into fruition. So it’s not going to be easy to stop it.
But South Africa’s nuclear ambitions face stiff opposition from different directions. These include environmentalist critics of nuclear power generation who use a blend of media, street theatre, objections at public consultation processes, and lawfare to try and stop the government’s ambitions.
The SA Faith Community Environmental Initiative group won an important victory earlier this year when the Cape High Court ruled that the government had not followed due process in its nuclear energy plans, and that they had to be halted. This effectively sent government back to square one.
Opposition parties have also been active, using parliamentary channels. They’re also considering taking the legal route to halt the nuclear juggernaut.
And there is palpable opposition within the ANC itself. A number of ANC branches sent motions critical of the costs of nuclear electricity to the ANC’s National Policy Conference. That conference’s report censored out all these motions.
The administration seems to be pulling out all the stops to bag this programme: What’s at stake?
By now, scandal-weary South Africans will react by saying: follow the money. In December 2016 the government dropped the bombshell that the procurement of its nuclear build programme would be taken away from the department of energy and done instead through Eskom.
The reason became clear when months of media headlines revealed that Eskom’s procurement mechanisms had been infiltrated and subverted by the Gupta family conglomerate to become a corporate feeding trough. With close ties to Zuma the Guptas stand accused of operating an elaborate mission to capture state business with a keen eye on the nuclear energy build programme
Every nuclear build contract, from “consulting” to turbines, would be inflated by one-fifth to build in the kickbacks to the corrupt middlemen tenderpreneurs.
Does South Africa need nuclear energy at this stage?
South Africa does not need nuclear energy at any stage.
About a decade ago, the government argued that South Africa’s economic growth was 5% per year every year, and that the resultant increase in electricity demand necessitated building 9 600 MW of new nuclear power stations. Critics pointed out that these figures were inaccurate.
Economic growth has shrunk significantly since then together with future projections of electricity demand. But the government still insist that the 9 600 MW of nuclear power proposition is backed by economic fundamentals. Clearly, this is a political decision uncoupled from economic realities.
On top of this, the most cost-effective generation of electricity would be a blend of imported hydro, imported gas, solar and wind. But these avenues seems to have been blocked by nefarious agendas.
In 2010, the department of energy proudly announced a 5 000 MW solar park to be built outside Upington. It hosted an international investors’ conference to kickstart progress. Since then, nothing has happened.
In 2014 the department proudly put up on the internet a slide show of how the Zuma and the DRC’s President Kabila had signed a treaty guaranteeing South Africa over 10 000 MW of imported hydropower once the Inga dams were constructed.
By December 2016 the department had effectively airbrushed these out of its presentations. Clearly, political power had been applied to compel the department to drop Eskom’s renewable division, and to suck up to its nuclear division. Which political power this was, became exposed this week when Zuma smeared opponents of his nuclear plans as western puppets.
What are global trends saying about nuclear energy?
<img loading="lazy" decoding="async" src="https://counter.theconversation.com/content/87022/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />The building of new nuclear power stations in developed countries is drastically declining. The UK is alone in signing a contract to build a new one. Nuclear vendors have stepped up their sales campaigns in developing countries to compensate.
This article was originally published on The Conversation.

Op-Ed: Zuma’s allies are once again gung-ho about nuclear. Will they get their way?

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CNBC Africa spoke to Jacques Pauw, Investigative Journalist and author of the book “The President&#8217;s Keepers – Those keeping Zuma in power and out of prison.

Jacques Pauw on whether the apartheid state lives on?

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CNBC Africa spoke to Jacques Pauw, Investigative Journalist and author of the book “The President&#8217;s Keepers – Those keeping Zuma in power and out of prison, on whether he has plans to translate the book into vernacular.

Why The President’s Keepers needs to be translated into vernacular

Anton Harber | University of the Witwatersrand
South Africa has produced two must-read thrillers in the past week. They are non-fiction, yet are as gripping and readable as any page-turner.
<div id="attachment_116988" style="width: 540px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-116988" class="wp-image-116988 size-full" src="http://cnbc.africa/wp-content/uploads/2017/04/103706559-GettyImages-456490733.530x2981.jpg" alt="South African president Jacob Zuma" width="530" height="298" />South African president Jacob Zuma | Justin Sullivan | Getty Images</div>
Veteran investigative journalist Jacques Pauw’s “The President’s Keepers” has, within a week, become a global best seller. It has had the advantage of the best available marketing push by South Africa’s State Security Agency, under the illusion that they were going to stop the book. The State Security Agency sent a cease and desist letter to a defiant Pauw and his publisher, claiming the exposé is in violation of the Intelligence Services Act.
Less well-known, but as important to those who want to understand what is happening in the country, is consultant and activist Crispian Olver’s enticingly-titled “How to Steal a City”.
<h2>Take some courage</h2>
I recommend you read them together. It will take some courage, as they are a most unsettling combination, but worth it.
<figure class="align-right "><img decoding="async" src="https://images.theconversation.com/files/193584/original/file-20171107-1008-169wyqs.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt="" /><figcaption>Cover Jacques Pauw’s latest book.</figcaption></figure>
Pauw’s book takes you on his journey to uncover the nature of Jacob Zuma’s presidency and its impact on South Africa, a trip that begins in the small Western Cape town of Riebeek-Kasteel and goes, via Moscow, to the Tshwane coffee bars where he meets his sources. Much of what emerges has been reported in bits and pieces elsewhere, but he weaves it together with great storytelling skill, and adds some important new revelations.
It is the most comprehensive picture of the rot at the heart of the Zuma presidency and the toll it has taken on important state institutions. Once he has worked through the tax collector, the South African Revenue Service, the National Prosecuting Authority, and the police, one is left gasping for air at the scale and depth of the destruction.
I don’t think it is necessary to weigh up the accuracy of his much-detailed and well-documented story, except to say that Pauw is a veteran muckraker whose credentials for getting sources to talk, putting his hands on the evidence, weaving all this into readable horror-stories, and withstanding the attacks of those who would stop him, are well established. So much so that the onus is on his detractors to disprove what he is saying. Even if half of it is true, it is chilling.
<h2>Oil for the ANC’s political machinery</h2>
Olver’s book might be even more important. It’s an insider’s view of how corruption has become the oil that keeps the ruling African National Congress’s political machinery working. Olver was sent in by ANC leaders to help clean up the metropolitan Nelson Mandela Bay region on the country’s east coast and pave the way for local politician and national football boss Danny Jordaan’s 2016 mayoral election campaign. At the same time, Olver was commissioned by then Minister of Finance Pravin Gordhan to clear out the rot in the city structure.
<figure class="align-left "><img decoding="async" src="https://images.theconversation.com/files/193585/original/file-20171107-1041-1q178eh.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt="" /><figcaption>Cover of Crispian Olver’s book.</figcaption></figure>
Olver’s story of how he identified and drove out the worst culprits in the city’s corruption, is heartening. He shows that it can be done when you have the political will, and Olver’s toughness. But he also describes how every cent raised to fund Jordaan’s campaign was exchanged for a job or a tender.
The ANC political engine runs on the fuel of transactional politics; without the offerings of jobs and tenders, the machine grinds to a halt. His tale provides rare insight into how the party funding system works as a driver of corruption.
Olver himself starts off as a knight in shining armour, but finds himself increasingly compromised as time passes, until he loses his political backing and flees the region.
Both these writers showed great courage. Pauw left the peace and quiet of running a country restaurant in Riebeek-Kasteel, knowing that this book would bring him the kinds of threats and harassment he experienced in the 1980s when he exposed the dark heart of apartheid’s police hit squads. Olver had to have a bodyguard at his side, so tough was the fight to regain control of the party and city.
Pauw’s book is a triumph of investigative reporting, but also contains a worrying critique of some of its practitioners. Pauw details at least three instances when his fellow reporters have allowed themselves to become part of the partisan mudslinging aimed at driving the good people out of state institutions, and protecting the venal. It is striking that some of the same names come up in all three instances, and all are centred around the local Sunday Times.
<img loading="lazy" decoding="async" src="https://counter.theconversation.com/content/87044/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />While South Africans can celebrate the important role investigative reporters have played in exposing state capture, they should be reminded that some have facilitated it, wittingly or unwittingly.
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This article was originally published on The Conversation.

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Jacques Pauw on whether the apartheid state lives on?

Why The President’s Keepers needs to be translated into vernacular

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Corruption

A new dawn for the banking sector – Cas Coovadia

Hard to reconcile Zuma’s SABC interview and the resignation speech

Zuma found himself backed into an inescapable corner

Late night for market watchers after Zuma’s resignation

Nigeria’s fight against tax evasion

Lord Hain accuses Hogan Lovells of propping up state capture

Op-Ed: Steinhoff scandal points to major gaps in stopping unethical corporate behaviour

South Africa’s race relations laid bare in Steinhoff corporate scandal

State capture is an elitist conversation – survey

Most S.Africans are willing to fight corruption than racism – survey

Business schools have a role to play in fighting corruption in Africa

South Africa’s Zuma again denounces “monopoly” white economic power

South Africa’s Eskom not insolvent but facing cashflow trouble

Op-Ed: Zuma’s allies are once again gung-ho about nuclear. Will they get their way?

Jacques Pauw on whether the apartheid state lives on?

Why The President’s Keepers needs to be translated into vernacular

Two books that tell the unsettling tale of South Africa’s descent

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Advertise With Us

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