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Sun,22Apr2018

Southern Africa

Flashpoints, elections and tech: What to watch in Africa this year

IMAGE WTWrevisedStrong initiatives are lacking to tackle Africa’s conflicts

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How to stay in power forever: A handy guide for African leaders

altThe reversal of fortune for President Robert Mugabe as tens of thousands of Zimbabweans took to the streets to demand his exit in November gave a nasty jolt to other long-time leaders such as Teodoro Obiang in Equatorial Guinea, Paul Biya in Cameroon, Yoweri Museveni in Uganda and Omar al-Bashir in Sudan. Yet these leaders are fighting back. One of our itinerant correspondents came across a well-thumbed handbook on political power at the VIP lounge at Yaoundé’s international airport – its title: Comment Régner pour l’Eternité. Now, we can publish exclusive extracts from this top secret text.

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Amplats reaches deal with S.African tribal leader in community fund row

A boy walks past the Lonmin's platinum mine in Marikana near Rustenburg, South Africa, Jan. 24, 2014. Photo: Themba Hadebe/AP/SIPAA South African tribal leader has agreed to a more transparent structure for a $14 million community trust funded by Anglo American Platinum (Amplats), a move that aims to curb unrest around the firm's most profitable mine.

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Steinhoff CFO steps down as crisis-hit retailer shuffles top team

Shoppers make their way along the wide shopping avenues inside the Mall of Africa in Midrand, South Africa, April 28, 2016. Photo: Denis farrell/AP/SIPASteinhoff's finance chief stepped down from the role on Thursday to focus on helping the South African retailer plug a $2.9 billion hole in its finances after an accounting scandal.

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Steinhoff says account doubts stretch back to at least 2015

Shoppers make their way along the wide shopping avenues inside the  Mall of Africa in Midrand, South Africa, April 28, 2016. Photo: Denis farrell/AP/SIPAFinancial troubles at South African retailer Steinhoff deepened on Tuesday as it said its 2015 results would have to be restated and maybe earlier figures as well, having already warned on its 2016 numbers.

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When the business of impunity meets the impunity of business

The apologias from multi­nationals embroiled in South Africa’s ever-expanding Guptagate scandal have a haunting familiarity. They mimic an earlier non-apology: the submission by former president F. W. de Klerk on behalf of the National Party to the Truth and Reconciliation Commission set up after South Africa’s first free elections in 1994.

In practised lawyer-speak, De Klerk asserted that “mistakes were made” during 50 years of apartheid, but that its leaders were “good and honourable men”. Unfortunately, said De Klerk, while trying to counter the “menace of international communism” a “context” was created in which “abuses by security personnel were not sufficiently discouraged”. Surveying the human costs of National Party rule – more than 21,000 killed in political violence – the commission rejected De Klerk’s formulation and concluded that apartheid was indeed a crime against humanity.

In London in September, De Klerk was asked for his view on the involvement of Bell Pottinger public relations company, KPMG auditors and McKinsey consultants in schemes that looted the South African state treasury and undermined honest officials. Ever the lawyer, De Klerk replied: “It is too early to tell.”

KPMG and McKinsey played apology poker. Starting with a low bid, they opened with a general statement of regret to no one in particular, coupled with a few early retirements, a suspension here, a sacking there. When people such as ex-finance minister Pravin Gordhan started talking about legal action, the parent companies paid attention. Partners from New York and London flew to Johannesburg, conveying personal regrets to Gordhan and other top officials.

Threats to these companies are multiplying. There are direct financial ones. How much did McKinsey’s and KPMG’s actions cost the treasury? State utility Eskom is asking McKinsey to refund the R1bn ($73m) it earned from a contract in partnership with Trillian, owned by a Gupta associate, Salim Essa. The status of that contract, judged illegal by several independent lawyers, is being tested in court. KPMG, according to one of South Africa’s top economists, Iraj Abedian, could be held liable for the loss of “tens of billions” of dollars caused by its damage to institutions and investor confidence.

Despite their apologias, both companies refuse to admit wrongdoing or legal liability, and South Africans’ anger towards them grows. KPMG International has been slow to launch an internal investigation into why its local company produced a politically charged critique, now withdrawn, of an anti-tax evasion unit that was troubling the Gupta brothers and President Jacob Zuma’s son Duduzane.

Guptagate could presage stronger demands for corporate and political accountability. It exposes more clearly the mechanics of grand corruption. Successive media reports conjure an image of predator politicians dragging reluctant multinational companies into a web of illegal and mispriced contracts from which mega-profits are laundered through tax havens. But Guptagate points to a different dynamic. Here, the company is the predator seeking out compliant and greedy politicians with whom to do business. What has developed in South Africa is a high-tension battle between independent regulators and courts on one hand taking on a criminal business-political condominium on the other.

But before anyone gets too smug about McKinsey’s and KPMG’s discomfiture, the revival of 783 charges against President Zuma reminds us of the origins of the current wave of grand corruption. In the mid-1990s, Western governments such as Britain, France, Sweden and the US – resolutely backing their national arms manufacturers – sold South Africa’s new government some $6bn of weaponry. Much of it was irrelevant to the country’s strategic needs, and almost all of it was at inflated prices, pumped up by third-party commission agents.

Politicians such as Zuma are accused of cutting themselves into the deal; some diverted cash into the coffers of the ANC to fund election campaigns. In fact, it was similar to corruption under apartheid rule. Then, politicians took their cut from the mining conglomerates and laundered their profits overseas. The main difference today is that journalists can report it without having security restrictions slapped on them. Mistakes were made, indeed.

This article came from the November 2017 print edition of The Africa Report magazine

 

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