Now you know it, now you don’t


Throughout the testimony of Angelo Agrizzi, the now repentant former COO of Bosasa at the #StateCaptureEnquiry, one point is consistently made clear; there are those who know it, and those who don’t. Those who know it are rewarded handsomely with cash gifts in grey bags, overseas trips, expenses and other pecks. My guess, those who don’t know it, must go eat cake. The toxic collusion between public officials, politicians and the private sector, has gone on unabated since the dawn of democracy in South Africa. Like the proverbial malice of, “do as I say, not as I do”, they preach the false gospel of free markets being they panacea for all South Africa’s ills, whilst they know their little dirty secret is well protected by conspiracy bond of evil doers.

The Oxfam report, “Private wealth, or Public Good”, is no different as it tells the sad tale of how inequality has risen at the global stage to create a giant chasm between the “have’s” and “have not” largely by driven by greed and policy failure. Whilst there might be no evident consequence for the rich, the cruelty of the rising gulf between the poor and affluent segments of society is that for the prior, it might mean going to school or bed on an empty stomach, dying of a treatable ailment because of lack of medical care or exclusion from mainstream economic and social life due to ignorance.

It is a tragedy that despite agreeing to Goal 10: Reduced Inequalities within the context of the 2010 Sustainable Development Goals, Billionaire fortunes in 2018 grew by a whooping US$900 billion or US$2.5 billion. This represented a 15% rise in the fortunes of the small group of 2200 global citizens who are majority white men, whilst the rest of humanity’s fortunes fell by 11% overall. That said, even within this group, the space is shrinking; from 61 billionaires in 2016, we were down to 43 in 2017 and now a meagre 26 billionaires. This is not surprising in a post-financial and economic crisis where we have seen the obscenest reduction in tax rates, relaxation of exchange controls, loose regulation of labour markets and a shrinking space for civil society to engage public policy. The emergence of the “Gig economy” has not made matters any better as few individuals now claim to have a monopoly over innovation, hard work and speculation activity.

We cannot continue like this, where only a good bank balance guarantees one good healthcare, enough food and a good education. This is more so because those who fall through the cracks are not few and growing. In South Africa, those in material extreme poverty grew from 11 million in 2011 to 13.8 million in 2015 which is a fast pace. Ordinary citizens are not pleased at all with being worse off year in, year out and an upsurge in violent protests and xenophobic flares.

South Africa has to choose prosperity of the many over aggrandizement of the few. Government should consider universal access to public services which are free at the point of delivery as an alternative policy shift. These should be provided by the public sector not the private sector. Evidence from studies conducted by Oxfam and others shows that these so called Public-Private Partnerships do not work in the medium to long term. There should be no user fees and no outsourcing of public services, but building state capacity to provide adequate, efficient and quality services should be prioritised.

A government of the future should be responsive to the needs of the community that it serves.  Clean, transparent and accountable government is key to providing good quality services. We do live in an environment where the constraint of scarcity of public funds determines state effectiveness. Paying due attention to value for money in the public service should be a principal tool for good governance. South Africa needs to get rid of corruption and the use of public power among public officials to derive personal gain. Not only should government show that they have a proper system of checks and balances to indicate whenever there is a breach, but also the political will to deal decisively with those found to be on the wrong side of the law. Bribery and corruption of the scale suggested in the #StateCaptureEnquiry is wrong, immoral and outright tragic and should have no place in post-apartheid South Africa where the national project should be about recovering the time lost in the engineered compromise of the black majority.

We do know that state institutions such as SARS were compromised during the tenure of President JG Zuma for unknown reasons. We therefore call on the South African government to restore the capacity of these key institutions to ensure that the super-rich in South Africa bare a fair and equitable share of the tax burden. A lot of work being done under the G20/OECD Base Erosion and Profit Shifting project still needs to be domesticated in practical ways to stem the tide of illicit financial flows that threaten the mere existence our young democracy.  Without state capture of government, proposals on the wealth and inheritance taxes should be put to national consultation and a decision taken for their suitability to the transformational objectives of South African society.

Again, the Oxfam report shows that poverty and inequality in South Africa has a woman’s face. Surprisingly, with all the efforts toward equalising the gender divide, the proportion of black women in extreme poverty grew from 38.1% in 2011 to 41.7% in 2015 according to StatSA reports. Policy and development should consider the differing needs of woman as our economy transforms. Particular attention should be paid to policy decisions that impact negatively on women such as the case where land and water rights are allocated to mines. The woman bears the full brunt of these bad policy choices as the principal caregiver who takes care of the food, water, fuel and healthcare needs of their households. The free, prior and informed consent of woman should be sought in full when government and big business bring mega projects to their communities. Projecting women’s voices into policy decisions at the local and national levels will require going beyond what is barely necessary to undo years of socialisation that tended side line women in decision making in rural patriarchal societies.

Thembinkosi Dlamini is the senior extractives advisor at Oxfam South Africa.