South Africans Suffer as Graft Saps Provinces

By LYDIA POLGREEN

TSHIKOTA, South Africa — When she moved from a cramped room in a boardinghouse to her very own bungalow on a speck of land here last year, Jeanette Munyai became one of the millions of South Africans given a decent home by an ambitious government program inaugurated at the end of apartheid.

House-proud for the first time in her life, she immediately planted corn, pumpkins and tomatoes on a patch of her yard. Only two things were missing: running water and electricity.

“They told us water and light was coming, but we are still using the bush as a toilet,” she said. “We are waiting.”

Ms. Munyai and her neighbors are unlikely to get water or electricity any time soon. The provincial government is broke, and the dry pipes and powerless plugs have for her and many others come to symbolize the heavy toll graft and cronyism have taken in this impoverished northern province.

Corruption has long bedeviled South Africa, but the crisis here in Limpopo Province has pushed the common practice of doling out overstuffed government contracts to people with friends in high places to its logical conclusion: bankruptcy. Provincial officials overspent their budget by an estimated $250 million, much of it on questionable — or blatantly fraudulent — government payments and contracts with private businesses enjoying close ties to the politicians leading the province.

“There is evidence emerging that some of these service providers are politically connected, and many of them may have gotten those tenders in dubious kinds of ways,” said Kenneth Brown, deputy director general in the Treasury Department.

Dan Sebabi, leader of Limpopo’s branch of Cosatu, the powerful coalition of trade unions that is allied with the governing African National Congress, put it more bluntly.

“You have leaders who are politicians by day, businessmen by night,” he said.

Graft and wasteful spending have sapped the government’s ability to tackle inequality. Only 3 of 39 government departments were pronounced clean in audits by South Africa’s auditor general last year. Only 7 of 237 cities passed muster the year before.

“We thought that South Africa could be different from the rest of the countries that came before us on the African continent,” said Gilbert Kganyago, leader of Limpopo’s branch of the South African Communist Party. “But at the rate that things are happening, we have actually caught up to the African scenario quite more quickly than we might have thought.”

A recent report by the auditor general found that in the last fiscal year, government officials and their relatives won $15 million in contracts for work with the Defense Department, the Tax Service and the Department of Home Affairs, among others. And that does not come close to accounting for the many millions of dollars quietly awarded to friends and other associates, experts note.

Almost from the moment it was elected to govern in 1994 after decades of fighting to end apartheid, the A.N.C. has struggled with allegations of graft. Jacob Zuma, the current president, took office only after a bevy of corruption charges against him were dismissed amid accusations of prosecutorial misconduct.

But corruption has become so entrenched that it is eating away at the nation’s soul, said Zwelinzima Vavi, secretary general of Cosatu, in a recent speech to announce the formation of an antigraft organization, Corruption Watch.

“We are moving towards a society in which the morality of our revolutionary movement — selflessness, service to the people and caring for the poor and vulnerable — is being threatened,” Mr. Vavi said. “If we do nothing it will be swept away by a tidal wave of a culture of individualism, a ‘me first’ attitude and to hell with everyone else. Some argue that we are already a society where only the fittest survive and dog eats dog.”

Corruption is a particularly serious problem in provincial governments, which are responsible for delivering many of the services needed by the poor. Many powerful regional politicians use their offices to enrich their friends, forming a coterie of wealthy elites reminiscent of the tribal chieftains the apartheid government used to administer the tiny, nominally independent bantustans where blacks were forced to live.

Limpopo has the nation’s second-highest proportion of people living in poverty — 62 percent, according to the South African Institute of Race Relations. The average unemployment rate for the province is 40 percent, but it is much higher for blacks and young people.

Signs of waste and fraud are everywhere. Pipes that were supposed to bring clean drinking water to parched, impoverished communities were laid improperly and burst, requiring the whole job to be done again, according to local officials.

Tiny government houses like the one in which Ms. Munyai lives are crumbling only months after being built. Since she has no water, she uses her toilet as a storage closet and has to walk several blocks to a shared pump several times a day. Roads paved a year ago are already covered with potholes.

“This road is not more than two years old,” said Geoffrey Tshibvumo, a local councilor from the Congress of the People, a party that broke away from the A.N.C., as he bounced along a rural road in the province one afternoon. “They spent millions on it, and it is already spoiled.”

The crisis here has been brewing for some time. Late last year, the province ran out of money and asked the central government to lend it about $130 million. But the central government balked at handing over such a large sum without first taking a close look at the province’s books.

A quick survey of its accounts showed that the state treasury was in chaos. State officials had made $360 million in unauthorized payments, and millions of dollars’ worth of contracts had been awarded without competitive bidding, the central treasury said.

The Education Department had 2,400 more teachers on its payroll than it was budgeted for, and 200 “ghost” teachers, who drew salaries but did not actually exist. The department had overspent its budget by almost $40 million even before ordering textbooks and other supplies for the coming school year.

In the Health Department, more than $50 million worth of goods had been improperly ordered, leaving almost nothing for salaries for government nurses and doctors. Public works contracts showed evidence that they had been manipulated, the Treasury Department said, to increase the cost of projects — and presumably the profits of the contractors. Consulting fees ate up a quarter of the infrastructure budget.

Big contracts tended to go to a small handful of companies, many of them run by close associates of the province’s top politicians, according to provincial government documents.

Some officials had been warning that the province was headed for a crisis. One whistle-blower in the Health Department sent a memo to a senior official in February 2011 outlining major problems with a contract for medical supplies. The prices for bandages and dressings had been inflated, the whistle-blower said, and the department could not possibly use the quantities ordered.

In addition, officials ordered more than $30 million worth of items in the last days of the fiscal year, most of it “labels and forms that are not critical or lifesaving drugs,” according to the memo. Prices for other items were wildly inflated. The national attention to the crisis in Limpopo is in no small part a reflection of the politics of the province. It is the home of Julius Malema, the polarizing leader of the A.N.C.’s youth league, who was suspended from the party for five years for his incendiary remarks and harsh stance against the president, Mr. Zuma. Limpopo’s provincial leader, Cassel Mathale, is a close political ally of Mr. Malema.

But many other provinces face a lesser version of the same crisis, analysts say.

“It is not unique to Limpopo — it is all over the country,” said Moeletsi Mbeki, a political analyst and businessman. “It is a general form of self-enrichment by the politically connected.”

Mr. Brown, the deputy director general at the treasury, said that politics played no part in the decision to intervene in Limpopo. The crisis threatened the country’s financial reputation.

“If you are sitting in New York and you are an investor in South Africa and you see a provincial government that cannot pay its teachers and nurses,” he said, “what does that tell you about South Africa?”

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Baltimore Nonviolence Center

Sunday, February 19, 2012