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The real ramifications of ‘Bosasa Gate’

Feb 11 2019 10:45
Andile Ntingi

Andile Ntingi is a journalist and the founder of Getbiz.co.za, an e-procurement service. (picture supplied)

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As Angelo Agrizzi was confessing before the Zondo Commission of Inquiry into state capture to his 18-year involvement in bribing government officials, senior politicians, trade unionists, lawmakers, and prosecutors, I received a call from an upset emerging entrepreneur. 

The entrepreneur expressed his disgust at what he was hearing from Agrizzi’s televised testimony.

Agrizzi, an ex-Bosasa chief operations officer, recounted how his former employer (now African Global Operations) allegedly paid massive cash bribes to a string of influential officials to secure lucrative government tenders and to obstruct corruption-related investigations into and the prosecution of the company by the elite crime-fighting police unit the Hawks, the Special Investigating Unit (SIU), and the National Prosecuting Authority (NPA).

What shocked the entrepreneur was the revelation by Agrizzi that Bosasa kept between R4m and R6m a month at its Krugersdorp premises in safes and impenetrable walk-in vaults belonging to Bosasa CEO Gavin Watson, for paying kickbacks to officials to secure new contracts or protect old tenders. 

According to Agrizzi, these monthly bribes, ranging between R5 000 and R1m and delivered to officials in grey plastic security bags, were “a drop in the ocean” compared to what the facilities management company was generating in monthly revenues.

“Black entrepreneurs have no future in this country. 

How do you compete with a company that pays R6m in bribes every month? 

This government encourages people to set up businesses to create jobs, only to give tenders to politicians and their white business partners,” the entrepreneur said.

For years, the ANC-led government has been promising that it will bring to bear its procurement muscle to support black suppliers, but very little has been achieved on this front. 

Many businesses fold within the first few years as they struggle to access business opportunities and start-up or growth funding. 

What is emerging from the state capture inquiry is that many ANC leaders and government officials are enriching themselves and their private sector corruptors at the expense of emerging businesses, which are supposed to create jobs to reduce the stubbornly high unemployment facing our country.

Over the last three years, government has been promising to set aside 30% of its procurement for emerging suppliers, co-operatives, and township businesses. 

But the implementation of the tender set-asides has not happened, despite the policy proposal being mentioned numerous times in speeches by politicians and policymakers.

The ANC’s 2019 election manifesto, launched on 12 January, is also full of promises to support emerging businesses. 

This includes implementing the 30% set-asides, rolling out the “Buy Local Campaign” to encourage consumers to buy from local businesses, and penalising government agencies and executives that flout localisation policies aimed at sourcing goods and services from local suppliers. 

All these promises have been heard before, but it appears they are rarely implemented, and that no one is held accountable for failing to implement them. 

The inclusion in the ANC’s election manifesto of the undertaking to penalise accounting officers/executives and the government agencies they run for flouting localisation policies is, however, an odd move by the ruling party. 

It follows accusations against state-owned enterprises (SOEs) Transnet and Passenger Rail Agency of SA (Prasa) that they broke procurement policies on local content in relation to the manufacturing of locomotives and rail passenger coaches respectively. 

The introduction of penalties may go a long way towards helping local suppliers access business opportunities in the public sector procurement and related value chains.

But as Agrizzi has shown in his explosive testimony: If you have wads of cash to bribe officials, you can easily circumvent laws and score tenders. 

Bosasa allegedly paid bribes to secure contracts for catering, high-security fencing, guarding, fleet management, IT, and facilities management from the departments of correctional services, transport, justice and constitutional development, water and sanitation, as well as SOEs like Airports Company of SA (Acsa) and the SA Post Office (Sapo).

These contracts could have been used to develop a large, black-owned facilities management conglomerate. 

But after 25 years of governing the country, the ANC has failed to utilise its political power to help facilitate the creation of big, sustainable black businesses. 

The few wealthy black people that have emerged in the democratic era are mainly minority investors in white companies.

Where do we go from here? 

And how do we ensure that state institutions are not captured again by private, unelected people who fleece them for their own enrichment? 

Some people have argued that the root cause of the problem is the tendering system, which must be reformed and made transparent to make it difficult for greedy officials and business people to exploit unlawfully. 

But I believe the biggest change that needs to be made is the strengthening of law enforcement and prosecutorial agencies. 

Had the Hawks and the NPA not been weakened in the past ten years, Bosasa Gate would have been stopped. 

So, too, the milking of the state by the Gupta brothers, who have since fled the country.

Having robust systems to prevent corruption is important, but as we have seen, systems can be manipulated by those we entrust to look after them. 

Our law enforcement authorities must be empowered to investigate, prosecute, and ultimately jail criminal syndicates. 

Andile Ntingi is the chief executive and co-founder of GetBiz, an e-procurement and tender notification service.

This article originally appeared in the 7 February edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.

bosasa  |  governement  |  corruption
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