South Africa: Have the Gupta leaks sunk the ship?

For a month now, after the leaking of what may be as many as 200 000 e-mails emanating from the Gupta family, the nation has had to endure a steady stream of nauseating revelations in the press about how corrupt their government is.

Investigative journalists at amaBhungane and the Daily Maverick are busy uncovering the extent to which the state has been looted. What they have found is in all probability only a fraction of what lies beneath.

Satirist Pieter-Dirk Uys has said that South Africa has the best government money can buy. So-called “tenderpreneurs” have long been operating in South Africa, rigging government contracts and inflating prices.

Satirist Pieter-Dirk Uys has said that South Africa has the best government money can buy.

The apartheid government was also rotten to the core. In his recent book, Apartheid Guns and Money, Hennie van Vuuren estimates that the “long shadow” of that regime means that R70 billion of South African tax-payers’ money is still illicitly moved offshore. Kwame Nkrumah once called AngloGold “the biggest octopus” because its tentacles were everywhere in African states. Big business lobbying, pressurising, blackmailing and bribing governments, while hiding their profits, is nothing new. But there is something particularly sinister about the tentacles of the Gupta mogul brothers Ajay, Atul and Rajesh (Tony) and their proximity to President Jacob Zuma, which has poisoned the state from the head down.

There is something particularly sinister about the tentacles of the Gupta mogul brothers and their proximity to President Jacob Zuma, which has poisoned the state from the head down.

Corruption on a grand scale

This is corruption on a grand scale, a systemic failing; not mere bribes and favours, but power that extends to the appointment of Cabinet ministers and an insidious influence that shapes the country’s actual legal, policy and regulatory framework; where its cover-ups are destroying the nation’s institutions and Constitutional safeguards; where its rhetoric is distorting reality to such an extent that the ANC is unable to address the most pressing issues facing it; and where the revelation of the corruption threatens to plunge South Africa into a political and economic crisis that will end in civil turmoil.

A protest placard of Atul Gupta carried by two EFF members on either side of it at the Zuma Must Fall protests in Cape Town. Photo: Wiki Commons

Briefly, here is a little of what amaBhunghane/Daily Maverick and Pieter-Louis Myburgh, in his book, The Republic of Gupta, have reported:

The Gupta family offered Mcebisi Jonas the position of Minister of Finance if he should take a R600 million bribe to, basically, give them the keys to the national Treasury. The Guptas offered politician Vytjie Mentor the position of Minister of Public Enterprises if she dropped the South African Airways route to India and gave it to them instead, even while SAA has been losing R370 million a month.

The current Minister of Finance, Malusi Gigaba, has throughout his career, previously as Minister of Public Enterprises and then Minister of Home Affairs, been an instrument of the Guptas. 

The current Minister of Finance, Malusi Gigaba, has throughout his career, previously as Minister of Public Enterprises and then as Minister of Home Affairs, been an instrument of the Guptas. While South African commuters suffer daily because of the country’s collapsing and near obsolete rail infrastructure, the Guptas were bagging R5,3 billion in kickbacks through ludicrously inflated prices for Transnet’s locomotive contract.

Activist Zackie Achmat addressed around 200 protesters outside Parliament in Cape Town, gathered to protest against President Jacob Zuma’s cabinet reshuffle. Photo: Ashraf Hendricks/GroundUp

And while the Free State province’s health system is imploding, the province forked out R33 million for the Guptas’ sister’s wedding, including R13 000 on chocolate truffles and R2,3 million on scarves. This came after the Guptas’ private plane full of wedding guests was allowed to land at a military airport – the Waterkloof Air Force Base. 

While the country was suffering from rolling blackouts and a cash-strapped Eskom was begging for a government bailout to keep the lights on, the state entity (among many other bigger and equally dodgy procurements) was lavishing R12 million on business breakfasts for the Gupta-owned newspaper The New Age and signing contracts for R43 million in subscription fees to the newspaper with no perceivable utility.

Read: Citizens must unite to save corruption-crippled SA

While 20 000 people in Hendrina, Mpumalanga, struggle to access medical facilities, the Gupta-owned Optimum Coal Mine has reneged on its social responsibility by not paying R3,8 million towards a clinic, which was a condition of being granted the mining license. Eskom contributed R660 million to help the Guptas buy Optimum in 2016. It was bought for R2,15 billion; six months later the Guptas sold its government-granted export rights for R3,6 billion, netting a cool R1,45 billion. 26% of Optimum shares were transferred to Zuma’s son.

About 200 people protested outside Parliament calling for President Jacob Zuma to resign. Photo: Ashraf Hendricks/GroundUp

After a probe by the Treasury stopped the gravy train and amaBhungane did an exposé on dead cows being dumped in a ditch, it transpired that the Free State had paid the Guptas R210 million in taxpayers’ money for a failed dairy farm. The money was secured under the then MEC for Agriculture, Mosebenzi Zwane, who is now (surprise, surprise) South Africa’s Minster for Mineral Resources. Zwane has introduced new rules for Black Economic Empowerment (BEE) in the Mining Charter, and the Guptas, who arrived as foreigners in South Africa in 1994, will qualify as BEE mining partners thanks to their naturalisation being fast-tracked by Malusi Gigaba when he was the Minister of Home Affairs.

Read: South Africa: gunning for the Guptas

In addition, the Guptas’ The New Age netted R9,4 million in subscriptions from SAA in 2015; R2,2 million in advertising from SAA, R3,4 million from the SABC and R4,5 million from Transnet in 2016.

I could go on like this for pages and pages, involving such parastatal institutions as Eskom, Transnet, Denel, Prasa, SAA, SABC and various provincial governments, until the reader grew thoroughly nauseous. Even then, the reader could rest assured that that was only the tip of the iceberg – and it may already have sunk the ship.

South African president Jacob Zuma reacts as he answers questions from opposition parties in parliament, Cape Town, 06 August 2015. President Zuma faces widespread criticism in parliament with questions being raised over alleged, a national electricity crisis out of control, rising unemployment and an ailing economy topping the list of failures under his tenure. Photo: ANP/EPA/Nic Bothma

The impact of corruption on a struggling economy

South Africa is in a recession. In the first quarter of this year, 48 000 jobs were lost. Youth unemployment stands at 51%, the second highest in the world. One in three South Africans is dependent on a social grant. The country has hardly anything left to tax without risking an already fragile economy. The Minister of Finance is so totally discredited that he is of no use whatsoever to attract foreign fixed investment, improve the country’s standing internationally or steer the Treasury with any credibility. There is a direct link between the corruption of the Guptas and why South Africa has had three successive credit downgrades and is currently enjoying double junk status. If left unchecked, the venality of the Zumas and their looting Gupta accomplices will be more than South Africa can survive.

In the next column: What is to be done about the “Zuptas”?