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Cape Town - Research carried out by the Anti-Corruption Centre at the University of Stellenbosch shows that about a fifth of what government spends - about R970bn for the 2012/13 financial year - is estimated to have been lost to corruption and other financial irregularities.
This will hardly be a surprise to South Africans, who have become accustomed to regular chronicles of how the very people meant to be stewards of the nation's wealth tend to misappropriate taxpayers' hard-earned pennies, said Clayton Thomopoulos, Deloitte director of risk advisory.
As the United Nations hosts International Anti-Corruption Day on Monday, the international Corruption Perception Index of 2013 ranks South Africa as 72nd out of 177 countries, with a score of 42 (zero being highly corrupt and 100 being clean of corruption).
Little wonder then that National Planning Minister Trevor Manuel has labelled corruption as the greatest threat to the National Development Plan, and that Remgro chairperson Johann Rupert recently told investors that corruption and red tape is so “pervasive" in South Africa that it is hurting the business and investment climate.
The UN believes corruption to be the single greatest obstacle to economic and social development in the world. It estimates that globally, $2.6trn is stolen annually through corruption and that $1trn is paid in bribes – in total about 5% of global GDP.
The UN Development Programme also estimates that up to 10 times the amount of official development assistance funds in the developing world is lost to corruption. The world body warns of the negative effects of corruption on welfare, education and health systems - all of which are only too visible in South African society.
To overcome obstacles to the country's economic and social development, to make our health and education systems work better, and to have more effectively functioning municipalities, the common phenomenon of tender fraud has to be tackled, said Thomopoulos.
"I believe irregular or improper transactions are often a result of direct and indirect conflicts of interest that were not declared, inadequately checked or actively ignored.
"At the outset of each tender process, I believe involved parties need to participate in an online financial interest declaration process that can detect conflicts and verify business interests on an on-going basis. The eradication of paper-based declarations of interest will not only expedite the completion process but will also provide an audit trail of declarations," he said.
It is important to track and record all statistics, progress and status in relation to any fraud or corruption matters, and to report on this to governance structures. The data will tell a story about risk trends and hotspots, he said.
"Contraventions and their related penalties should be set out clearly, and there needs to be consistent action against offenders," said Thomopoulos, a forensic specialist for many government and private entities for about 17 years
In an ideal South Africa, potential offenders should know there is zero tolerance for any form of fraud or corruption, and be aware that there will be severe consequences if they carry out an offence.
The clock is ticking, and it is high time to take the UN’s warnings on corruption seriously. The time has come to listen to our top business people, our national planning minister and civil society advocates against corruption.
"We have to get rid of pervasive corruption," said Thomopoulos.
Both public and private sectors should use technology and education to address fraud and corruption in society. This will save the country billions in taxpayers’ money, restore investor and business confidence and ultimately put South Africa back on the path to inclusive prosperity, Thomopoulos said.
This will hardly be a surprise to South Africans, who have become accustomed to regular chronicles of how the very people meant to be stewards of the nation's wealth tend to misappropriate taxpayers' hard-earned pennies, said Clayton Thomopoulos, Deloitte director of risk advisory.
As the United Nations hosts International Anti-Corruption Day on Monday, the international Corruption Perception Index of 2013 ranks South Africa as 72nd out of 177 countries, with a score of 42 (zero being highly corrupt and 100 being clean of corruption).
Little wonder then that National Planning Minister Trevor Manuel has labelled corruption as the greatest threat to the National Development Plan, and that Remgro chairperson Johann Rupert recently told investors that corruption and red tape is so “pervasive" in South Africa that it is hurting the business and investment climate.
The UN believes corruption to be the single greatest obstacle to economic and social development in the world. It estimates that globally, $2.6trn is stolen annually through corruption and that $1trn is paid in bribes – in total about 5% of global GDP.
The UN Development Programme also estimates that up to 10 times the amount of official development assistance funds in the developing world is lost to corruption. The world body warns of the negative effects of corruption on welfare, education and health systems - all of which are only too visible in South African society.
To overcome obstacles to the country's economic and social development, to make our health and education systems work better, and to have more effectively functioning municipalities, the common phenomenon of tender fraud has to be tackled, said Thomopoulos.
"I believe irregular or improper transactions are often a result of direct and indirect conflicts of interest that were not declared, inadequately checked or actively ignored.
"At the outset of each tender process, I believe involved parties need to participate in an online financial interest declaration process that can detect conflicts and verify business interests on an on-going basis. The eradication of paper-based declarations of interest will not only expedite the completion process but will also provide an audit trail of declarations," he said.
It is important to track and record all statistics, progress and status in relation to any fraud or corruption matters, and to report on this to governance structures. The data will tell a story about risk trends and hotspots, he said.
"Contraventions and their related penalties should be set out clearly, and there needs to be consistent action against offenders," said Thomopoulos, a forensic specialist for many government and private entities for about 17 years
In an ideal South Africa, potential offenders should know there is zero tolerance for any form of fraud or corruption, and be aware that there will be severe consequences if they carry out an offence.
The clock is ticking, and it is high time to take the UN’s warnings on corruption seriously. The time has come to listen to our top business people, our national planning minister and civil society advocates against corruption.
"We have to get rid of pervasive corruption," said Thomopoulos.
Both public and private sectors should use technology and education to address fraud and corruption in society. This will save the country billions in taxpayers’ money, restore investor and business confidence and ultimately put South Africa back on the path to inclusive prosperity, Thomopoulos said.
