President Cyril Ramaphosa said the conditions of the loan agreement could not be made public. File Photo: IOL

GOOD governance, transparency and accountability should be pervading every action the South African government takes today if it's to restore the critical confidence and trust with business and the nation. 

Which is why the opaque terms of a series of recent financial deals with China should be a major concern for the citizens of our country.

When given the opportunity to provide more details around a Chinese state-owned bank loan to power utility Eskom recently, President Cyril Ramaphosa was coy. 

The president said the conditions of the loan agreement could not be made public as they were subject to confidentiality clauses and would put Eskom at a disadvantage when pursuing more funding from the markets.

While it is no secret that the Chinese government is a growing source of investment and lending into Africa, there are rising concerns – not just on the continent, but also in Southeast Asia – that some of the Chinese money invested abroad could be more destructive than it is beneficial.  

There are legitimate concerns around Africa's growing trade deficit with China and the ability of the individual countries to finance rapidly growing, Chinese-financed external debt. But the biggest risk that no one wants to talk about is the threat to good governance. 

Speaking in Addis Ababa earlier this year, former US Secretary of State Rex Tillerson said African countries should be careful not to forfeit their sovereignty when they accept loans from China, the continent's biggest trading partner. He was right. 

Most of the loans extended to African governments are shrouded in secrecy.  Transparency is one of the basic principles of good governance, yet a common characteristic of the deals struck between the Chinese government and their emerging market partners is that the terms of these deals are not made public.

The fact that there is a blackout on the information indicates that these loans are not soft and likely subject to huge interest at least.

A culture of secrecy is still a threat to state transparency. 

The last thing we need is to be in the dark about the deals made by state-owned enterprises, which gain their revenue mainly from South Africans. Taxpayers have a right to know how and where their hard-earned money is being spent.

Adam Craker is chief executive of IQbusiness.

The views expressed here are not necessarily those of Independent Media.

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– BUSINESS REPORT