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Prevent capture of flood relief funds

We are now in the midst of another human and natural catastrophe, says the writer. Picture: Theo Jeptha/ African News Agency (ANA)

We are now in the midst of another human and natural catastrophe, says the writer. Picture: Theo Jeptha/ African News Agency (ANA)

Published Apr 30, 2022

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Can the ANC demonstrate to the South African public that it is indeed a renewed organisation and that it is serious about closing the chapter on state capture? Then it now has the opportunity to demonstrate it in KwaZulu-Natal with the recovery from the flood disaster.

For the past decade, South Africans have associated the governing party with the disasters of corruption, mismanagement and state capture. Public perception is dominated by low levels of trust in public governance, and the public take it for granted that in any new project, abuse of public resources will take place.

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They reached the deepest point of disappointment when the Special Investigating Unit investigations into corruption in the public health sector during the Covid-19 pandemic exposed numerous cases of financial abuses by public officials.

Their disregard, by implication, for human life, for the health of others and for those in distress, disqualified them as champions of public service and human development.

We are now in the midst of another human and natural catastrophe. More than 400 persons died in the floods in KZN, many houses were destroyed, infrastructure disabled, education disrupted, and economic activities disrupted.

In these circumstances, at least two types of public interventions are called for: immediate humanitarian assistance for those who lost their livelihood and rebuilding of the damaged infrastructure.

Humanitarian assistance is an immediate need for shelter, food, water, clothes and money. Infrastructural reconstruction is a longer-term need and much more capital intensive.

Ironically, the unintended consequence of the disaster is that it created many new projects for construction companies and short-term job opportunities. What Durban did for the 2010 World Cup in terms of infrastructural development should now be repeated.

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This natural disaster is a wake-up call for many densely populated areas that climate change poses a serious threat of natural disasters. A new look at urban spatial planning and development will be required all over South Africa. Take, for example, the Karoo town, Laingsburg, which was destroyed in the 1981 flood and major areas of the town had to be moved to higher levels. Bigger South African cities must do the same spatial redesign.

Reconstruction and rehabilitation are capital intensive and will require numerous projects. All of them have a high potential to become bedevilled by corruption. The general expectation is therefore negative. Even more complicating is the fact that this period overlaps with a number of regional and provincial ANC conferences in KZN.

These have become concentrated opportunities for cultivating and rewarding political patronage networks, and for that, large amounts of money are required. The disaster relief funds are ripe for a picking.

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But if the disaster relief management is approached as an opportunity to demonstrate their bona fides, then a number of considerations can assist in it. The municipal financial year commences on July 1, which means that the budgets of eThekwini and other municipalities are being prepared at the moment. It also includes their Integrated Development Programmes.

The disaster recovery will therefore, automatically, become a core element of the annual budget. It can be included in the main budget and does not have to wait for emergency, supplementary budgets.

The fact that the government announced a National State of Disaster and not a provincial one implies that national departments can take the lead in the process. The national inter-ministerial committee will be chaired by the Minister of Co-operative Governance and Traditional Affairs, while all the focus will be on KZN. The National Disaster Management Act is much better equipped for natural disasters than for health epidemics.

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President Cyril Ramaphosa indicated that he consulted the leadership of the Solidarity Fund so that they could become available for rehabilitation projects. The Solidarity Fund is a Public Benefit Organisation formed by the government early in 2020 to assist with the pandemic. The fund combines private business initiatives with NGO assistance. Its management consists of seconded private sector leaders such as Gloria Serobe, and the current CEO is Tandi Nzimande, who occupied leadership positions in First Rand and Hollard.

The fund demonstrated in the past two years its capacity to mobilise and disburse huge amounts of funds without high risks of corruption.

The initial amount it received was R3.8 billion, and they successfully disbursed R3.3bn of it: R2.3bn for the health response and R429 million for humanitarian assistance. With the unrest in KZN in July, it received donations of R500m plus R100m of its internal resources. R573m of that was disbursed by various means, including vouchers.

It demonstrates that this fund has the capacity to disburse large amounts in a short period relatively effectively.

The Solidarity Fund’s presence in this disaster situation can therefore be of great assistance. Procurement in the form of contracts for private companies, poses the highest risk of large corruption. Contracts will be inevitable, especially for infrastructural projects. A more robustly monitored procedure is therefore required.

The National Treasury’s Central Procurement Office is not designed to play that role, but the current situation requires a more centralised procurement process kept away from politicians and government officials. It is almost inevitable that the National Treasury will have to play a role in that. The same applies to the auditor general’s office.

Much experience was gained during the Covid-19 epidemic with managing social welfare and economic recovery relief measures. Sassa, the UIF, Ters (Temporary. Employer-Employee Relief Scheme) and other relief measures which utilised the post office or banks and avoided handouts should be considered as part of the government relief infrastructure for KZN. Digital processes reduce the risks of corruption to some degree.

* Dirk Kotze is a professor in the Department of Politics at Unisa.

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