Understanding The Phenomenon of "State Capture" in South Africa
Understanding The Phenomenon of "State Capture" in South Africa
Understanding The Phenomenon of "State Capture" in South Africa
South Africa
Michaela Elsbeth Martin
Hussein Solomon
University of the Free State, South Africa
Abstract
In recent years, South African newspapers routinely carry stories about corruption. Such corruption has
become increasingly institutionalized leading to the phenomenon of state capture. This is where
individuals or groups operating in the public and private sectors influence government policies for
personal advantage. This paper provides instances of state capture and how this negatively impacts on
broader governance as well as society at large. The fact that such state capture is occurring at a time
when the South African economy is slowing down is particularly troublesome since it means that more
people are getting less and is ground for concern for the future political stability of the country. The
paper concludes with some key recommendations on how this dangerous trend can be reversed.
Introduction
In recent times the concept of state capture has become very popular in the political and
economic arena of South Africa. It was particularly the close affiliation between the President of
South Africa, President Jacob Zuma and the Gupta family that stirred up great concern about the
South African state facing a possible state capture. Many analysts, however, argue that the notion
of state capture has long been part of the dealings of the ruling party, the African National
Congress (ANC), but has been concealed by the fact that the South African state has not been
regarded as a failed or failing state. This is primarily because the ANC government is still able to
exercise full administrative control, maintain some degree of peace and is able to consistently
provide public goods to its citizenry (Jonas 2016: 16). However, it has also become evident that
South Africa, under the administration of the current government, is both internally and
externally falling apart. Exports are falling, commodity prices are falling, and the rand has
slumped. The economy shrank by 1.2 percent in the first quarter of 2016 alone: it is now only the
continent’s third largest. Unemployment is at 26.7 per cent – an eight-year high – and business
confidence is at its lowest for more than two decades (Hartley 2016: 1). Additionally, the
assassination of political affiliates within the ANC during the municipal elections has shown that
political power has become an important element in South African politics (Sutch 2015: 9).
Moreover, political power is seen as a mechanism that can be used to extract financial benefits
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from the state, and not necessarily to foster an environment where the needs of ordinary citizens
are met. This indicates that power is interest driven, meaning that the South African economy is
becoming increasingly centralised, where only a small segment of society is benefiting from it.
The emergence of debates, discussions and engagements pertaining to state capture and
patronage networks in recent months, requires us to critically examine the potential effects that
such networks have on the South African State, the economy and the society at large. Moreover,
to understand the repercussions of not dealing effectively with issues of such nature should also
be considered and should be dealt with in a coherent and direct manner. With this being said, the
main aim of this study is critically analyse state capture in the South African context.
The first section of the study will consist of an introduction to the study, followed by a
theoretical framework on state capture. Section two will briefly look at the ideological structure
of the African Congress in the post-2008 era. Section three is the heart of the study, where
various cases will be critically examined to highlight instances of state capture in the dealings of
state affairs. Section four will discuss the future of the South African State pertaining to its
political and economic landscape. Section five will discuss concrete solutions on how to reverse
corruption and patronage within the South African state. The paper will end with the concluding
remarks and a list of references
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Understanding the Phenomenon of “State Capture” in South Africa
through governance systems and rules being flouted with, leading to a lack of transparency and
accountability within the structures of the state.
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Understanding the Phenomenon of “State Capture” in South Africa
In his previous role as MEC in the Free State, Zwane served the Guptas interests through a dairy
project which the provincial government paid millions for, but never materialised (Shivambu
2016). Since his appointment, South Africa’s once-vaunted mining sector has been destroyed by
clumsy state intervention implemented by the Guptas aimed at benefiting the family and
rewarding Zuma’s cronies (Hartley 2016).
In December 2015, Zuma shocked the entire nation, including the internal structure of the
ANC, when he dismissed former Finance Minister, Nhlanhla Nene from office, and replacing
him with Des van Rooyen. In order to make sense of the President’s decision, it becomes crucial
to understand the connections between Van Rooyen and Zuma, prior to his decision. Mr. van
Rooyen and Pres Zuma worked together in the Mbokodo exile camps in the late 1980s as
Umkhonto we Sizwe (MK) operative and soldier. Additionally, van Rooyen is not an elected
leader of any organisation, but a political extension of North West Premier, Supra Mahumapelo,
who is as corrupt as Ace Mangushule and Jacob Zuma himself. According to Winkler (2016),
this was a strategic move by Zuma, because just like Mangushule, Zwane and Mahumapelo, it
became critical for van Rooyen to extent into a senior cabinet position, with the aim of
strengthening their criminal syndicate. In defence of appointing a new finance minister, the
President asserted that Van Rooyen is a loyal comrade and was the most qualified individual for
this position (Marrian 2016).
The President’s decision however had a dire impact on the economy; the rand plummeted
against the dollar and European currencies. It emerged that Zuma’s business connections with
the Gupta family influenced this decision. Initially, Zuma was approached by Russia to build a
9,600 MW nuclear procurement programme in South Africa, by which the Gupta’s would supply
the uranium. The nuclear programme’s estimated cost was between R800-billion and R1.6-
trillion (Business Times 2015: 16). The Treasury Department greatly opposed this initiative, as it
became evident that this nuclear programme was glowing with controversy. It became clear that
Zuma assumed personal control of the nuclear programme, which has been characterised by
secret meetings; undisclosed documents and classified financial reports, deceit and aggressive
campaigning (Rand Daily Mail 2015). Former Minister of Finance Nene, described this initiative
as a national suicide, arguing that it will make no sense to have a nuclear plant while the
economy is growing at less than 2 percent per annum, and the unemployment rate at 27 percent
at the time (City Press 2015). Additionally, tensions between Nene, and the South African
Airways Chair, Duduzile Myeni, a close ally of the President, also influenced Nene’s dismissal
after he rejected a proposal from the SAA board to restructure a re-fleeting transaction with
Airbus. The Gupta’s purportedly orchestrated this move behind the scenes, with the aim of
capturing South Africa’s airline (Shivamba 2016). It can thus be argued that Nene’s dismissal
occurred due to his reluctance to comply with illegal instructions made by Zuma’s and his
alliances both in business and state-owned enterprises.
It was these incidences that brought Zuma’s strategies of bending state institutions outside of
the security realm to his own will to the fore, and it became evident that his shadow security state
came into conflict with SA’s constitutional democracy. Moreover, analysing these incidents
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indicates how Zuma aimed at cowing the security, economic and political apparatus of the state,
closing down the space for free expression and subordinating state institutions to his own
political will. Corruption and patronage is thus at the forefront of Jacob Zuma’s Presidency.
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but rather the internal variables such as corruption and patronage processes that will determine
the fate of the country. As Pithouse (2016), noted earlier, the ANC remains committed to
escalating issues of corruption due to centralising power, rather than seeking to resolve it by
dispersing power. It is therefore safe to say that South Africa has emerged from a peace economy
where economic, political and cultural institutions functioned together to resolve conflict and
inequality, to a war economy where corruption, illicit dealings and patronage networks have
become the order of the day. South Africa’s war economy is sustained by one individual, Jacob
Zuma, who has successfully captured the entire apparatus of the state. As such, Jacob Zuma will
stay in power, as he has secured his position by appointing his most loyal allies in top positions
in state institutions who are benefiting immensely from his rule. It can thus be argued that unless
Jacob Zuma steps down as president before his term ends in 2019, South Africa might face a
possible state failure.
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40), a string of warlords and patronage lords are running the provinces, and below them, a new
class of black businessmen and government mandarins who work together to divert state
resources into their pockets. This predatory elite can feed its voracious appetite only by
redistribution away from others, in the process impoverishing everyone but itself. This
phenomena as it already stands at this point in time, is the main cause of many societal problems
within the South African state.
Many economists agree that the distortions within the South African labour sector have
impeded both economic growth and the alleviation of poverty in the country (City Press 2015:
17). The creation of a labour aristocracy, whose members are beneficiaries of the crucial
political support their unions provide to the ANC, has made it extremely difficult to generate
employment for the society at large. The rise of the unemployment rate and the lack of economic
growth, is one off the major factors that will determine the fate of the South African state.
Echoing on this point, Johnson (2015: 45-48) suggests that South Africa, under the governance
of the ANC, the country is slipping backwards, and the possibility that the country falling into a
possible civil war, cannot be overlooked. According to Johnson (2015: 87), the outbreak of a
possible civil war is triggered by factors such as the shrinking of the manufacturing and mining
industries due to incompetency and corruption. The only sector that is still showing growth is the
public one, where civil servants earn large salaries, and do little in return. This is primarily the
case in terms of South Africa’s education system. Surprisingly enough, South Africa’s education
system is funded at the highest level in the developing world, but produces the second poorest
math and science results on the entire planet (Business Times 2014: 18). More devastating, South
Africa’s tertiary intuitions are barely surviving, receiving government funding at 0.8% of GDP,
which is below global standards (Business Day Live 2016). As a result, the feasibility and
sustainability of universities are at risk, and, according to Jansen (2016), if the government
continues showing reluctance in investing more money into this sector, by the year 2020 some of
South Africa’s prestigious universities, will be mere education colleges. In addition, the millions
the government is spending on social grants and civil servants salaries, is not sustainable in the
long term, especially with economic growth at zero percent and unemployment rate at 27 percent.
The future of South Africa doesn’t look so bright.
Analysts assert that the only possible solution for South Africa at this point in time is the
appointment of a new governmental structure. South Africans can either choose to have an ANC
government or choose a modern industrialised economy, they cannot have both. Economic
growth cannot be conducive or be sustained in an environment crippled by corruption, cronyism
and greed (Daily Maverick 2016).
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the judiciary, prosecuting authorities, the police and the army. Instead of protecting citizens
against the abuse of power, these institutions become an extension of the president’s corrupt rule.
This is the very reason why South Africa’s constitutional democracy of South Africa has failed
tremendously. A need therefore arises to put strategies in place to reverse, if not, fix the problem
of state capture in the South African state.
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Deputy President of the ANC, Cyril Ramaphosa, Finance Minister Pravin Gordhan and perhaps
the Secretary General, Gwede Mantashe including the ANC National Executive Committee
(NEC) will play pivotal role in forging the removal of Zuma and his cronies from power before
the 2019 National Elections. Moreover, the party should embark on numerous internal
programmes to reverse the decline, including tackling corruption and stabilising state-owned
enterprises. Collective action from the internal structures of the ANC is crucial in combatting
state capture and corruption. As reiterated by Johnson (2015), the removal of Mr. Zuma is not a
matter of choice, it is a necessity. No country can thrive economically in an environment marked
by institutional decay. The internal structure of the ANC thus have to choose between an
industrialised economy or a corrupt leader that is running a criminal syndicate with state
resources .If the ANC wishes to stay in power, it has to work together with the people of South
Africa, by pressurising the internal removal of politicians and leaders that indulge in corrupt
behaviour and unashamedly steal from the poor.
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and on ANC meetings. As such, many citizens are discouraged to speak out against corruption.
With this being said, it becomes a necessity for effective laws to be articulated and implemented
to protect whistle-blowers from potential threats. Chairperson of Corruption Watch South Africa
has similarly placed emphasis on this point, and asserted that it becomes extremely difficult for
such laws to be implemented when those orchestrating and institutionalising corruption need to
give authorisation for such processes to occur (Corruption Watch 2016). As such, it becomes
important for organisations outside the state to work hand in hand with the Office of the Public
Protector to cooperate and exchange information to deter and detect corruption and state capture.
Moreover, establishing sectoral coordinating structures and a national coordinating structure (the
National Anti-Corruption Forum) to coordinate, monitor and manage the national anti-corruption
programmes in the country. As it stands, the Office of the Public Protector is one of the few state
institutions that still operates independently from the influence of Jacob Zuma and his criminal
syndicate.
Conclusion
From the above it is apparent that state capture has to a great degree infiltrated into the core
structures of the state. It is also apparent that corruption has become institutionalised within the
ANC, with the president, Jacob Zuma, taking the lead. This is reflected in the fact that Zuma has
appointed some of his most loyal cronies in strategic state institutions with the aim of
suppressing the independence of these institutions. Moreover, the Premier League, as it is
commonly referred to, supports the ANC in exchange for Zuma’s support, and in turn steals state
resources. The presence of the Guptas and their close relationship with President Zuma has been
highlighted with great discontent. It has become evident that this family has systematically
benefited from Jacob Zuma’s rule in which their own private interests have significantly
influenced the state’s decision-making processes. This point directly speaks to the following
incidents: Appointing Zwane as Minister of Mineral Resources and the dismissal of Nene and
strategically replacing him with van Rooyen. The Guptas have thus emerged as one of the latest
capitalist oligarchies seeking to capture tenders in the state, especially in state owned enterprises
in the country
The behaviour of cronyism and greed has infiltrated to the Municipal sphere of government.
The capturing of power here, whether it in terms of the economy or state institutions, is for self-
enrichment and not necessarily for serving the people of the country. This phenomenon has
become very problematic within the structures of the ANC, so much so that members kill each
other to benefit from government tenders and contracts. This variable implies that South Africa
has successfully emerged form a peace economy into a war economy marked by increased
patronage networks. As a result the political and economic landscape has been tainted. The
economy is in decline, unemployment rate is above 27 per cent and the first half of 2016 has
been marked with protests in the public sector. The public sector is the only one that is currently
in growth, however this growth is not sustainable due to incompetency and corruption. The
outbreak of a possible civil war is hovering over South Africa and according to Johnson (2015),
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all variables for the outbreak of such a catastrophe are present in the country and that it is only a
matter of time.
It is no doubt that the source of South Africa’s woes lies within the internal structures of the
ANC. It is also becoming increasingly evident that the ANC’s ideological principles of non-
racialism and the National Democratic Revolution carries little weight when the very same
individuals that are supposed to uphold them routinely trample over them for self-enrichment. It
therefore becomes crucial for aggressive action to be taken to ensure that those benefiting from
state offers to be removed. Moreover, the ANC has to come to terms with the reality that Jacob
Zuma and his criminal syndicate is not effective nor sustainable especially when ordinary
citizens are bearing the consequences. Moreover, the party has to appeal to building an
industrialised economy and provide employment for the vast masses, or appease a leader and his
loyalists who stand in the way of a better future for all South Africans; they can unfortunately
not have both.
However, reversing State Capture within the South African State remains a priority, but it is
also important to note that it is extremely difficult to overcome state capture especially because it
has been institutionalised in the core structures of the state. It is therefore an ongoing process that
needs to be approached with caution and needs to be carefully monitored.
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Biographical note
Michaela Elsbeth Martin lectures in the Department of Political Studies and Governance at the
University of the Free State, South Africa (Qwa Qwa Campus). Hussein Solomon is a senior
professor, also at the Department of Political Studies and Governance at the University of the
Free State.
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