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The President of South Africa, Cyril Ramaphosa, has been praised for his anti-corruption actions. But it will have to do a lot more to regain investor confidence.
Criticism, Ramaphosa must show that the perpetrators of the era of former President Jacob Zuma will be held responsible by lawsuits. Many academic studies, including mine, show that investors view the effective execution of law and order as an indicator of the protection of property rights
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The stabilization of the public debt and the attraction of the necessary investments will lead to both investigations of corruption and prosecution of those involved. It will be impossible to achieve this goal if investors are not convinced that the rule of law is alive and well.
Ramaphosa has started well. He devoted much of his early days to removing compromised and corrupt elements in key leadership positions, including ministries, public enterprises, and security and justice agencies.
He then launched initiatives targeted to the outside. This includes the creation of special envoys to attract 100 billion dollars of investments in the country.
These measures will repair the wrongs of the past, but they are far from sufficient. It is not enough for the politicians who have supervised and actively contributed to the decimation of the social and economic fabric of the country to purely and simply withdraw from politics, to access new positions within the ANC or to be transferred to other departments. Likewise, it will be possible to overthrow Zuma's legacy only if officials appointed by his ministers are also the subject of investigation and prosecution
Major Damages
Damages Economic problems caused during the Zuma years are enormous. The latest economic growth figures are not encouraging. Gross domestic product fell 2.2% in the first quarter of this year and is expected to remain weak for the remainder of the year.
The latest ratings from global rating agencies are also unflattering. For example, S & P noted that the fiscal and economic trajectories of South Africa are still very weak. As a result, the country is vulnerable to investor sentiment. This is reflected in the weakness of the country's currency as investors cast shares and domestic bonds.
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Damage is particularly prevalent in public institutions. The extent of the damage is reflected in the latest report of the Auditor General, Kimi Makwethu. Irregular Expenditures, which include payments for contracts that were made illegally or without the necessary approvals, increased by 75% over the prior year. Unnecessary and wasteful expenditures, which are in vain payments, have increased by 71%.
The Auditor General notes that municipal corruption has steadily increased for more than a decade but that the problem has rapidly worsened over the past five years. The main reason for the deterioration of public finances was that corrupt officials were increasingly thinking that they were safe from prosecution. This does not bode well for investor confidence
Does the state have the means?
A troubling problem is that the country does not have the capacity to deal effectively with the litany of the misfortunes bequeathed by Zuma. The country has limited resources for a process of prosecution that will be long and laborious.
The state's prosecutorial ability was recently brought to light when a court ruled against the State Property Confiscation Unit in a case against the Gupta family. The judgment shows that the country's judicial institutions have been systematically compromised.
And although a state capture investigation commission was put in place under Judge Raymond Zondo, it is unlikely that she will finish her job in less two years.
This suggests that, despite optimism, South Africa does not have the institutional capacity to fight systemic corruption and sue the people involved at a sufficient pace to convince investors foreigners that their investments are safe from corruption. Accountability
Although there are many leaders with large public profiles that need to be thoroughly examined for corruption, it's not enough to focus on the "top of the pyramid" only.
Mbadive corruption requires many facilitators, in both the private and public sectors, to actively participate in wrongdoing or, at the very least, look away. This means that even though some high-profile arrests and condemnations may be useful signals to investors that concrete steps are being taken to restore the state, a much stronger process is needed to consolidate the economy and the institutions. crucial of South Africa. raises an essential question: how ready is the country to endure in the short term to completely eliminate corruption, creating more sustainable prospects for the country?
Recent experiences in Brazil show that investigations into state corruption can complicate economic recovery. This is all the more true if the slowness of the court process means that politicians, public servants and directors are not required to report quickly.
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Ramaphosa did well to turn the state ship over the last 100 days, but eradicate and rectify it. The legacy of state capture will require immense political will institutional capacity. Without visible accountability, corruption will just decentralize in the shadows and South Africa will be at risk again.
Sean Gossel, Lecturer, UCT Graduate School of Business, University of Cape Town and Timothy London, Lecturer, University of Cape Town
This article was published originally on The Conversation. Read the original article
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