The events that culminated in the strategic fuel fund (SFF) controversy are not dissimilar to the general trend of events that had similar or even more devastating consequences within the energy portfolio under the previous minister of energy, Tina Joemat-Pettersson, and more particularly to the central energy fund (CEF) group and its affiliates.
Pre-eminently, the government’s instability - especially in PetroSA with the high rotation of its board members and senior executives leaving under a cloud of conflict with shareholders or due to allegations of dishonesty - has provided the tell-tale signs of a portfolio in shambles, with meddling and incompetent political oversight.
The effect of such contagion permeated all the way back to the principal shareholder, CEF, where the same scenario was replicated with similar consequences.
Characterised by false starts of ill-conceived projects like Project Genesis, the changing of experienced chairpersons, over-reaching into executive functions, the CEF is now a shadow of its former self. Completely dependent on its subsidiaries to earn tribute, such a well of revenue driven by the two most profitable entities PetroSA and SFF, is now in doubt, casting doubt on the solvency and sustainability of the CEF as an organisation.
But no fortuitous crisis has ever provided South Africa with such a looking glass into its follies, its functioning and the efficacy of state management as did the 10 million barrels of crude oil that changed hands - ostensibly without any one knowing whether it was a sale, a rotation or corrupt bartering.
Loss to the fiscus
In short, however, never let a good crisis go to waste. Let’s look at the facts.
According to Finance Minister Malusi Gigaba’s Medium-Term Budget Policy Statement, the country is languishing in a R50.8billion deficit in revenue collection.
To put this in the correct perspective the two subsidiaries of the CEF, PetroSA and the SFF, in fiscal 2016 caused nearly R20bn in losses, the equivalent to 40percent of the woes of the country’s fiscus.
What do we learn from such a perfect crisis?
A crisis is like a category five hurricane, requiring all the wrong elements to be at the same place at the same time. For one, too many changes at ministerial level averaging to a new minister every 18 months, is bound to percolate the kind of deleterious effects that accompany instability contrived at political level.
Importantly, as a fundamental consideration the tendency of tampering with talent and replacing it with patronage is a perfect recipe to interrupt and subsequently collapse the integrity of an institution. There would be beneficiaries for sure. And they too would be aware of the inhering benefits of a crisis and accordingly will take advantage of it.
But above all, none of the actors in this melodrama are unaware that to this day neither the government nor its oversight parliamentary committees have bothered to define what is strategic.
And so it was that the 10million barrels of crude oil were indeed not strategic, notwithstanding the fact that they were under the charge of the SFF. For if they were strategic, one should expect that a regime to regulate strategic assets would be in place.
The lessons to be learnt are seminal.
While the financial beneficiaries of a crisis are a handful, the larger benefits of the lessons of it should be broadly distributed to advance the institution of governance and the normative value of accountability.
It is important that no one - or at least no coterie of conspirators - should perversely collapse the proprietary ambitions of a constitutional body politic for their own dishonourable end.
The elements that make up this perfect crisis involve shadowy actors, money laundering, weak administrative systems, incompetence and above all, corruption.
As corruption is the full embodiment of the expression of coherence of all the different parts moving in unison, the opportunity we have as a country is to stare at the heart of corruption and force it to own up.
To the extent that some of the actors are European, others with a significant American presence, it is not other worldly that institutions like the FBI, Scotland Yard and other European investigative agencies would shed some light on the things exclusively learnt from their probing of whosoever gravely or fleetingly of their denizens were involved in this saga.
The pressing question is: Who benefited from this corruption?
- BUSINESS REPORT