South Africa's Massive Corruption Probe at State-Owned Companies

South Africa is investigating alleged $7B corruption at state-owned companies.

South Africa has active investigations into alleged corruption totaling more than $7 billion at some of its top state-owned companies.

In Cape Town, South Africa, a major investigation into alleged corruption at state-owned companies is underway. The national anti-graft unit has reported that South Africa is actively looking into corruption cases totaling more than $7 billion at some of its top state enterprises.

The investigations, which are not new and some dating back to 2018, involve six key state-owned businesses including Transnet, Denel, Eskom, the National Lotteries Commission, South African Airways, and PRASA. At Transnet alone, around 60 suspicious contracts and hundreds of cases of conflict of interest and alleged corruption worth nearly $4 billion of public funds are under scrutiny.

In addition to these, nearly 40 other ongoing investigations are taking place into alleged corruption involving different state-run entities and government departments, worth billions more dollars. The Special Investigative Unit (SIU) has also finalized several investigations before making them public.

This extensive probe reveals the scale of South Africa's corruption problem over the past 15 years. Under former President Jacob Zuma's administration, there were widespread allegations of corruption over lucrative government contracts. Zuma stepped down in 2018 amid these accusations.

A judicial inquiry implicated numerous government officials and executives at state-run businesses in taking kickbacks and bribes. Allegedly, the culture of graft permeated all levels of government, yet few of those implicated have faced criminal charges.

The corruption has had a disastrous impact on South Africa's economy. At power utility Eskom, which is at the center of many scandals, mismanagement and graft led to a near collapse of the electricity supply. As a result, South Africa experienced record levels of nationwide blackouts last year. More than 270 contracts at Eskom worth around $2.2 billion are being investigated by the SIU, a probe that has been ongoing for six years.

At passenger rail company PRASA, investigators believe $540 million was lost to corruption, partly through a scheme involving "ghost employees." One contract under investigation dates back to the 2010 soccer World Cup hosted by South Africa.

During Zuma's presidency, the African National Congress party became associated with corruption allegations. In this year's national election, graft was a central issue, and the ANC lost its parliamentary majority for the first time since 1994. Current President Cyril Ramaphosa has pledged to clean up his party and government and hold those responsible accountable, but anti-corruption experts are skeptical about the recovery of much of the lost money.