SA: New forms of corporate-State Capture in the ‘new dawn’

Government and business stakeholders at a Business Unity of South Africa (BUSA) Strategic Dialogue for a Transformed and Inclusive Economy held in Gallagher Estate Midrand North of Johannesburg. File picture: Simphiwe Mbokazi African News Agency (ANA).

Government and business stakeholders at a Business Unity of South Africa (BUSA) Strategic Dialogue for a Transformed and Inclusive Economy held in Gallagher Estate Midrand North of Johannesburg. File picture: Simphiwe Mbokazi African News Agency (ANA).

Published Aug 4, 2023


By Phapano Phasha and Ashraf Patel

In African politics, the term ‘Mobutism after Mobutu’ has come to signal a phenomena- that even though infamous leader Mobuto Sese Seko of Congo left office decades ago, the ‘same ole’ system of corruption, mismanagement, tribalism, cronyism continues to this day in DRC Congo and most of Africa.

In his 2011 political science classic - Ruling in a Void- The Hallowing out of Western Democracies, leading political scientist Prof Peter Mair deftly analyses the processes of how democracies are ‘hallowed out’ and primarily outsourced to the private sector and elites. The key thesis is that although the political parties themselves remain, the parties become redundant and they no longer seem capable of sustaining democracy or governing. And in the process they start to depoliticise key decision-making to the private sector

This is what is currently happening in South Africa, the African National Congress (ANC) led government is currently delegating major government decision-making to the unelected private sector and a large array of commissions with key state functions being liquidated or outsourced. All political parties contest State Power to translate its voters’ interests into public policy, to recruit and promote political leaders capable of exercising executive power and to compete for control of the executive through national elections. The classic mass party, Mair writes, ‘gave voice to the people’.

Sadly what we have today and particularly in this current ‘new dawn’ administration is a model of corporatised democracy’- a model when Cabinet functions - as representatives of the electorate- which are meant to implement popular party positions are delegated to a myriad of commissions and councils set up by the President, and largely unelected.

So it is not surprising that in the past year, BUSA – a representative of the largest corporations in South Africa have made a play in its intensive high level lobbying of government and its virtually taking over key functions of government and cabinet as with its latest CEO Save South Africa ‘pledge. This is in fact a new form of ‘state capture, but in a more sophisticated guise and narratives of ‘building government capacity ’or helping government with the ‘Covid crisis’, ‘energy crisis’ or ‘fighting crime’, Yet when one digs deeper of these ‘helping hand to government ‘it is less than a strategy to capture economic policy making in critical sectors and essentially prime government for the privatisation of the most lucrative parts of state entities.

South Africa is a developing economy with a sustainable tax collection base and quality institutions that can solve the energy, transport-logistics and crime crisis in the broader tripartite model including labour and the electorate. BUSA and the ANC led Government has seemed to forget its mandate to include stakeholders labour and the electorate who are now effectively on the margins of the current administration.

South Africans do not need cheap gifts from BUSA and Big business whose agenda is pushing government into a narrow elitist policy pathways, and, to reduce ‘red tape’ so they can privatise and make super profits and buy out our state owned enterprises, as is the case with Transnet, Eskom and SAA debacle under Minister Gordhan.

The state is liquidating itself and outsourcing government functions.

In an article that appeared on Daily Maverick by Ben Cronin who is an Advocate of the high court and state law advisor titled “Common cents: The State Capture Commission is itself a symptom of State Capture ( common-cents-the-state-capture-commission-is-itself-a-symptom-of-state-capture/), Cronin argues that instead of the State emphasising the need for sufficient government spending and staffing to meet public needs, the emphasis all too often has been on reducing the capacity of the state and merely changing the manner in which the private sector engages with the state.

The effect of this approach is actually to legitimise private capture of the state’s regulatory functions via the legal system itself. Real state entities tasked by our Constitution with investigating and prosecuting acts of crime are steadily defunded, depopulated and increasingly rendered defunct.

The State Capture Commission with “hourly” paid advocates caused taxpayers billions yet the National Prosecuting Authority which must investigate and prosecute findings from the Commission is deliberately defunded. A case in point was the Bloemfontein High Court Judgement where the NPA lost its first State Capture case which went on trial and the accused cleared of fraud and money laundering charges.

How State functions have been undermined can also be qualified with the Presidential Climate Change Council who are opposed and have clashed with the Cabinet approved Integrated Resources Plan IRP which was developed by Cabinet and mandated by Parliament. Hence we have ‘two governments’ talking and contesting energy policy in the midst of the greatest energy crisis the nation has faced. Policy work is delegated to private consulting houses and commissions whilst deployed ANC Ministers cry foul to the very private sector that the country’s energy direction is being hijacked.

BUSAs Capacity building fund of R100 million to assist Government and its Resource Mobilisation Fund (RMF), which recently raised R100 million to contribute expertise to the government via the National Energy Crisis Committee is another example of the private sector initiatives to supposedly support the government. Its director Busi Mavuso was for years a board member at Eskom who with the then CEO of Eskom, Andre De Ryter, collapsed the public utility Eskom in favour of privately owned Renewable Energy companies which are part of BUSA.

Why would BUSA lay out R 100 million for this task?

Our Government is aptly capacitated to conduct its own research and technical work. We have an array of institutions such as SANEDI, HSRC, Mintek, CSIR,, DSI and various universities that already conduct high level work on energy policy development. Secondly, there has been no improvement in our energy crisis since the work of the National Resource Mobilisation Fund commenced a year ago. In fact, the energy crisis has deepened during the coldest winter in SA, impacting gravely on industry and leading to job losses despite more privately owned Renewable Energy’s being deployed and BUSA members raking in billions from the State.

South Africa’s ICT capability is a complete disaster despite the government spending billions on private sector consultation despite the hyped Presidential 4IR Commission.

The Post Office is on its knees, most of Denel Intellectual property has been sold, Telkom is being primed for privatisation despites it being profitable; and with the SASSA grant system and driver’s license debacles reflects a glaring feature of this ‘hallowing out the state’ model of democracy’ that Mair alludes to, all the while priming and then pushing for privatisation which benefits those who premise themselves as our liberators and their business proxies.

Even the globally acclaimed work of Professor Mariana Mazzucuto – ironically an economic panel advisor to the President has argued the need for broad based socially inclusive innovation and state capacity in a post Covid world order.

Her work is being considered by the EU and nations such as Brasil and China etc. Yet this vital new developmental innovation state model and its thinking is being wilfully ignored by the Presidency, who is actually fully committed to the neo liberal McKinsey model of governance which profits a few, leading to mass job losses and further entrenches poverty and inequality in a nation that the World Bank cites as having the highest Gini Coefficient in the world.

This is compounded by the role and functions of global consulting firms such as McKinsey, BAIN et al in undermining government functions, or in the Mckinsey's case the repurposing of government and its function and restructure state entities that in the final analysis, actually benefits the very clients it does work for, who are JSE-listed and Multinational Corporations MNCs. Again, Professor Mazzucato’s latest publication - The Big Con (2023) is a critical analysis of the debilitating role of global consulting firms in undermining state capacity and public value.

While BAIN, McKinsey has supposedly ‘left SA public sector’, McKinseyism continues- in more sophisticated forms, just like ‘Mobutism after Mobutu’.

The Capture of the State post the Gupta era requires urgent public debate in a space where even the governing party has seemingly accepted its fate as a Capitalist Controlled organisation which continues to put the interest of Capital before that of the electorate.

The democratic gains by the ANC led Government which gained its legitimacy through popular power since 1994 has since been eroded. The middle class which was created post 1994 has been decimated and on poverty lines as a litany of research from financial institution shows, the youth are hopeless and helpless whilst the poor have accepted their fate, whilst Black Business Council which is meant to represent Black Business is always begging for space in the dinner table only reserved for BUSA and it’s members who rake billions in a sea of poverty.

It is therefore not a surprise that the ANC leadership and its leagues are anticipating coalitions with the Democratic Alliance as a running mate which will simply be a consolidation of power by big business and political parties which serve their interest, with Alliance largely partners in tow.

With the poor and working class disorganised and voiceless South Africa is enroute to being depoliticised by a small interest group which has no interest in the country but profits.

*Pasha is a political commentator and Patel is a research associate at Institute for Global Dialogue (IGD).