February 21, 2012 / 11:34 AM / 8 years ago

Corruption puts strain on South Africa budget

JOHANNESBURG (Reuters) - Lucas Netshiavha feels resentful whenever he sees the slice of his salary taken by South Africa’s taxman, since - so he believes - a large chunk will end up in the pockets of corrupt politicians or be washed down the drain of state mismanagement.

“I wouldn’t mind so much if my ‘donation’ was properly spent on education, medicine in hospitals or to help my grandmother back in my home village, but I have serious doubts that’s happening,” the IT specialist said.

Netshiavha is well paid, but his pay packet is split between his widowed mother and two siblings, and his fears of wasted taxes and creeping corruption under President Jacob Zuma are not unfounded.

Since he came to office in 2009, Zuma has come under fire for what many see as a failure to crack down on officials implicated in misappropriating billions of dollars in state funds.

“Corruption is the bane of our country,” IFP opposition leader Mangosuthu Buthelezi told Zuma during a debate in parliament last week. “Yet, sir, you shy away from this issue.”

Despite raking in over 600 billion rand in taxes each year, Finance Minister Pravin Gordhan is likely to announce a budget deficit of more than 5 percent on Wednesday to fund social services and infrastructure spending.

However, the many schools without books and hospitals short of medicines, not to mention a lack of houses and sanitation for millions of South Africans 18 years after the end of apartheid, suggest much of the money is not getting through.

Newspapers are awash with reports of scandals about luxury cars and stays at swish hotels for government bigwigs, while in Limpopo, Netshiavha’s home province, the central government has taken over the finances after mismanagement plunged it into bankruptcy.

A report by the Auditor General’s office shows the rot is widespread, with state departments spending an unauthorized 20 billion rand in the 2010-11 fiscal year. Three of 39 departments and less than half of 272 state firms had clean audits for 2011.

The former head of the police’s Special Investigating Unit estimates the government loses up to 30 billion rand to corruption every year, although most analysts believe this, at less than 4 percent of the budget, is the tip of the iceberg.

Amid reports of hospital patients going hungry and children being taught in the open air, labour federation COSATU has turned on the ANC, its long-time ally.

“Billions of rand which could and should have been spent on improving our healthcare and education systems ... and providing basic services to our poorest communities are being squandered,” secretary-general Zwelinzima Vavi said at the recent launch of an anti-corruption watchdog.

Critics say Zuma, who has himself faced corruption charges which were then dropped amid opposition allegations of a political fix, has only paid lip service to fighting the rot within his government.

He fired two ministers implicated in graft last year, and suspended his police chief pending a probe into a dodgy property lease deal, but no criminal charges have been laid.

He has also pledged to stamp out corruption and said his government has launched scores of investigations into graft and sent treasury officials to take over local government branches teetering on bankruptcy due to their questionable spending.

Transparency International now ranks Africa’s largest economy 64th globally on its perceived corruption index, down from 38th in 2001.

“There is a lot of talk about rectifying the waste, the inefficiencies and the corruption but I don’t see the kind of action that we’d like,” said economist George Glynos, managing director at ETM.

“There is not a lot of sense in talking about whether we should be increasing budget deficits and government spending when you know it’s not being utilized efficiently,” Glynos said.

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