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Corruption hinders growth, results in fewer jobs – Patel

Feb 19 2018 19:35
Lameez Omarjee

Cape Town – Corruption leads to lower economic growth and fewer jobs, and those implicated should be charged, Economic Development Minister Ebrahim Patel said on Monday.

He was speaking in Parliament during the debate on the State of the Nation Address.  

Patel highlighted corruption in both the public and private sector and called for action from both government and private players to combat the "cancer".

Particularly when funds are allocated toward infrastructure development, Patel explained the importance of making sure “no rand” is diverted for corrupt purposes or fraudulent tenders.

“Corruption leads to lower growth, fewer jobs, less localisation when we buy locomotives from Spain, as well as fewer houses and classrooms being built,” said Patel.

“State owned enterprises like Eskom, Denel and Prasa have been the focus of serious allegations,” he said.

To root out corruption government must ensure key infrastructure projects are reviewed and Cabinet should receive reports on actions to be taken by law enforcement agencies to recover the monies, he said. Those implicated should be charged as well.

Private sector corruption

Patel also spoke out against corruption in the private sector. The fraud at Steinhoff has caused damage to workers’ savings and the reputations of corporates. It also exposed “serious deficiencies” by company auditors.

“This comes hot off the heels of questionable conduct by KPMG and McKinsey and other private sector companies in the state capture project,” said Patel.

He added that the large-scale collusion and price fixing by many industries is a criminal offence, as has been underlined in the Competition Act which has been amended.

Patel called for government and private bodies to address the “corrosive” effects of unethical business practice. Government is currently reviewing guidelines and actions. Patel implored private sector professional standard bodies to do the same.


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