This is a lightly edited excerpt from Prisoners of the Past: South African Democracy and the Legacy of Minority Rule (Wits University Press, 2021) by Steven Friedman.
The roots of patronage: Path dependence, ‘state capture’ and corruption
For some commentators, post-1994 corruption in South Africa confirms one of the truisms of politics: African states are always corrupt.
The belief that majority rule in Africa always collapses into corruption as the governing elite turns the state into its property is deeply embedded in journalistic understandings of the continent. This view began influencing coverage of South Africa almost immediately after democracy’s advent. It also shapes much scholarship on Africa – “neopatrimonialism”, the term used by scholars to describe corrupt governance, has spawned a very active school of academic writing which influences African scholars as well as those in the West. This is so despite the fact that the term fails to explain anything and is more a prejudice about postcolonial Africa than a means of analysing it. This way of thinking about postapartheid South Africa underpins the view that this country negotiated a new order which closed the book on a troubled past and opened the way for harmony and prosperity until politicians, driven by greed, used public office to enrich themselves and so to ensure that South Africa went the way of all African countries.
This view implies, of course, that corruption and “state capture” are new, a product of the moral failings of politicians thrown up by democracy in Africa. This misunderstands the dynamics of which the Jacob Zuma period was a product because it fails to see this malfeasance as a symptom of the survival of the past. Path dependence alone did not cause corruption. But corruption continues a South African pattern which is centuries old; path dependence has made it more likely and probably more of a problem than it would have been if a different path had been followed.
A traditional way of life?
Corruption – the “unsanctioned or unscheduled use of public resources for private ends” – in South Africa dates back to the beginning of white settlement in the mid-17th century.
Jan van Riebeeck, the Dutch East India Company official who began white settlement, was sent to the Cape to redeem himself after he was found to have engaged in “private trading” in a previous posting. There is no evidence that he resumed his self-enrichment scheme at the Cape. But this early phase of colonial rule was marked by significant corruption. A study concludes that the public finances of the Dutch period at the Cape were in a poor state “due to poor tax collection, tax evasion and corrupt officials”.
The British colonial period, beginning in the Cape in the early 19th century, continued the tradition and provided the first example of “state capture”. The 1820 settlers, who arrived from Britain and became merchants and farmers, campaigned against the corruption of various colonial governors. A study of the period finds that “state institutions were distorted to serve private interests … In state capture the benefits accrue to the private interests … Evidence … from both quantitative and qualitative sources suggests that the ruling elite influenced the public expenditures of the Cape Colony”. One guilty party was the best-known representative of late-19th-century British colonialism, Cecil John Rhodes, who was forced to resign as Cape prime minister when a close associate and Cabinet minister gave a contract to a friend allowing him to operate an 18-year monopoly on catering for the government-run railways.
Coloniser corruption crossed the battle lines between British and Afrikaner settlers: the Transvaal Republic of President Paul Kruger, which Rhodes sought to destabilise and on which Britain waged war, was also a site of corruption. Its extent may have been exaggerated by the British – the Kruger republic, which resisted British colonisation, attracted much international sympathy and the British government, in its concern to justify its overthrow, vilified it. But “anecdotal evidence certainly indicates a great deal of nepotism and financial laxity in the civil service”. Another study is more emphatic, finding that the republic operated largely to the benefit of a small group of “notables” who enriched themselves at the expense of their fellow citizens: “The Transvaal in the late 19th century was a feudal society in which the Voortrekkers each ‘received’ a farm for which they had to pay regular tax. However, when they defaulted on their tax payments, the farms were put up for sale. With the connivance of the local Landrost [magistrate] the ‘Notables’ were often the first to be informed of such sales and so they became landlords with many farms in their possession.”
Nepotism, often associated in scholarship and journalism with rule by Black Africans, was also a strong feature of the republic. A study reports that one of the president’s sons was his private secretary, and his son-in-law, FC Eloff, “was a businessman who was granted several [government] concessions, namely business monopolies of one kind or another”.
After the British defeated the republic, they did, according to one analysis, attempt to replace fairly arbitrary rule with a state governed by rules and procedures. But this administration was, in this view, also friendly to “state capture”. British colonial rule “facilitated the rent-seeking activities of the Anglophone mine owners” who had arrived from Britain to take advantage of the discovery of gold and diamonds. “Rent seeking” means here the search for profits which exceed those available in a competitive market: “Rents include not just monopoly profits, but also subsidies and transfers organised through the political mechanism.” So the mine owners, with the support of the British administration, used political muscle to secure advantages and profits which would not have been available without those political connections.
Why corruption was so repeatedly a feature of the colonial orders is not entirely clear. A common explanation is that colonisation is, by definition, corrupt – it assumes that a state (or, in the Cape, a company) may use force and deceit to gain the land and assets of people who are militarily weaker. This creates a sense that the country “belongs to its colonisers and so they can use its resources for any purpose they choose”. But while this explains the colonisers’ belief that they can use public power to extract anything they wish from the colonised, it does not explain coloniser leaders’ apparent belief that they were entitled to the property of their fellow colonisers. One possibility is that colonisation is always justified by a sense that might is right: the powerful are superior beings and so the colonisers with more power deserve to exploit those with less. Whatever the reason, public officials who abuse trust and businesses which buy public power are a very long-standing South African reality.
These examples happened far too long ago to influence directly the behaviour of post-1994 officials, politicians and businesses. What may well have influenced them is that, in the last years of apartheid in particular, corruption became endemic, far surpassing any other period. Views on the impact of apartheid corruption on post-1994 government differ. Some scholarly literature argues that while there were significant similarities between apartheid-era and post-1994 corruption, there were also important differences. Another view argues that the corruption which became entrenched before democracy’s advent simply continued in the new order in other forms. Before exploring these views, we need to discuss briefly the literature on apartheid-era corruption.
Corruption under apartheid
A common view is that corruption was low at the beginning of apartheid but later became endemic. If this is true, it applies far more to the experience of white voters than to those of the Black majority. Tom Lodge notes that as late as the mid-1970s, JN Cloete, director of the South African Institute for Public Administration, “could maintain that the controls in the civil service were so stringent that bureaucrats had ‘little opportunity to use patronage and the conferment of financial benefits for the achievement of improper objectives’”. But he adds that “there is plenty of evidence … that by the 1980s, political corruption … was quite common in certain government departments as well as in homeland administrations”. More specifically, “the case of the Department of Development Aid, the successor to the Native Affairs Department, suggests a pattern of very generalised misbehaviour. Other official enquiries suggest that land transfers administered by the South African Development Trust [a body under the authority of the Department of Native Affairs and its successors] had for decades been managed dishonestly … Several homeland governments … supplied documentation of political corruption on a major scale.” Corruption in departments which dealt with Black people seems to have begun in the system’s very early years. The anthropologist Mia Brandel Syrier found in 1959 that “clerks in the administrative offices of the township in which she conducted fieldwork charged a fixed ‘under the counter’ fee for advice, referrals and appointments”.
From the very beginnings of apartheid, then, the arms of state which dealt with Black people were corrupt. Black and white officials would have been able to exploit Black people because they were disenfranchised and denied rights; government functionaries could expect impunity. Aspects of the system made corruption almost inevitable. The requirement that Black people carry passes if they wanted to live and work in the cities gave officials power which they could use for gain: “In the 1970s, Black policemen were commonly believed to refrain from charging pass offenders in exchange for bribes.” None of this should be surprising. It would be odd if officials who could wield arbitrary power over rightless people never used this to enrich themselves. “The more powerless ordinary people were, the more officials abused their position; for this reason homeland governments were especially dishonest as were the central government departments … which worked most closely with them.”
But even from an early stage, while Black South Africans were directly in the corruption firing line, officials also used public office to serve private interests in their dealings with white society. A study of apartheid-era corruption reports: “At one point in the 1960s it was suspected that a large part of the top echelon of [the power utility] Eskom, together with … [senior members of the ruling establishment] used their political leverage to secure contracts for large multinational corporations.” The company “lost ‘hundreds of millions of rands in secret overseas deals’ by the mid-1980s, according to former accountant Dr Gert Rademeyer. In just one nuclear energy deal that turned sour, Escom [now Eskom] lost R67 million.’”
A study of the apartheid state adds that Prime Minister John Vorster, who took office in 1966, was “alleged to have started some of his cabinet meetings by sending out details of recent land bankruptcies … to inform ministers about the availability of farms in the market”, thus keeping alive the tradition begun by the “notables” in the Transvaal Republic. A key source of this corruption was the Afrikaner Broederbond, a secret society to which virtually all government ministers and many senior officials belonged (and was said to play a key role in deciding who occupied government posts). Members “were likely to be among the first to know of forthcoming large government procurements and of where universities and harbours were to be built (an advantage for property speculators)”. Nico Diederichs, who was appointed to the Cabinet in 1958 and became finance minister in 1967 (and state president in 1975), was alleged to have “agreed to moving the base for South Africa’s gold sales from London to Zurich in the 1970s on condition that a small amount … would be transferred into a private account” for each ounce sold. In 1980, a retired judge told a newspaper of a R28 million secret bank account held in Switzerland which was said to be “linked to Diedrichs [sic]”.
That the state under apartheid was viewed by the ruling elite as a source of personal enrichment is also suggested by another study, which links aspects of this behaviour to the first National Party government led by DF Malan, who took office in 1948: “Malan and his successors pursued blatant strategies of promoting Afrikaner rent-seeking, although generally within the bounds of legality … Corruption was somewhat constrained by the legal fetishism that was characteristic of Afrikaner nationalist ideology in this period.” So “rent seeking” was encouraged by the first apartheid government despite the public concern for legality. This was no doubt facilitated by the fact that the initial National Party project was pursuing not only white welfare at the expense of the Black majority, but also the economic empowerment of white Afrikaans speakers who had been kept at the margins by English-speaking economic power holders. This may have created the sense among the political leadership of white Afrikaners that they were entitled to grow rich because they were breaking the English-speaking monopoly on wealth. So the notion that politicians and officials engaged in a political project to propel a group into the economic mainstream further this goal by enriching themselves – a view sometimes used to justify post-apartheid self-enrichment by “notables” – is deeply ingrained in the country’s history.
While there is evidence of corruption from apartheid’s beginning, there is wide agreement that it increased dramatically, in size and scope, in its later years. In one sense, this was a product of success: “By the 1970s the very success of Afrikaner nationalism had created a large new middle class and a substantial capitalist class, who were enjoying an unprecedented prosperity. These highly educated, consumerist and increasingly well-travelled groupings could no longer be contained within the horizons of organisations built around the poor and struggling of the 1930s and 1940s.” In another sense, corruption reached heights under apartheid – with significant consequences for the post-1994 society – as a response to its failures.
As pressure built on apartheid, and the government began changing policy in an often seemingly incoherent way, it lost credibility among white Afrikaans speakers. “With the Afrikaner establishment unable to discipline its followers, a scramble for personal enrichment began.” Towards the end of apartheid’s life, the growing sense that its days were numbered prompted those who could to take as much as possible before the opportunity to take ended. Another factor that created direct ground for corruption was the growth of the international sanctions campaign, which sought to isolate apartheid: “A further contributing factor to the efflorescence of corruption was the government’s response to the development of the international campaign for sanctions during the 1970s and 1980s.” The government’s “sanctions-busting” campaign used secret and illegal connections and arrangements. It also sought to counter international opposition to apartheid through secret propaganda campaigns. In both cases, “those involved in activities directed to these ends were shielded from normal public service or parliamentary scrutiny”. Breaking sanctions and conducting covert propaganda wars were an open invitation to corruption – one accepted enthusiastically by those who fought to sustain apartheid. The journalist Ken Owen may have overstated the case when he claimed that the apartheid government was forced to negotiate by “the bankruptcy of a nation that had been looted until it could no longer honour its debts”. But his remark does indicate the degree to which corruption became rooted in apartheid’s last years.
In the view of Hennie van Vuuren, defending apartheid required a particular way of governing and a particular relationship between the government and business: “When the struggle for South Africa’s freedom was at its fiercest, economic crime not only festered but became state policy. Corruption, money laundering, sanctions busting and organised crime had become a necessity for the survival of the state.” Van Vuuren and his research team showed how elaborate this operation was. Because the scheme was costly, it required a bank, Kredietbank, and a network of relationships with corporations, oil and arms dealers, governments and intelligence agencies. The domestic conflict between the apartheid government and activists working to defeat it also stimulated corruption and for much the same reason. Defending apartheid required large amounts of government money, used to buy support or subvert opponents, much of it in special funds largely hidden from public scrutiny. Jonathan Hyslop observes: “Navy and conventional force army seem to have stayed relatively ‘clean’, while intelligence, special forces and mercenary units seem to have been rotten to the core.” Crucially, Van Vuuren argues that the criminal networks formed within the apartheid state did not die in 1994. In his view, they form the foundation for post-1994 corruption: “Many of the actors that were corrupt under apartheid rapidly ingratiated themselves into the new order. This created a new elite pact based on criminality and corruption. The arms deal is the most potent example of the devastating impact this new criminal class had on the country’s democratic institutions. The old and the new were quickly intertwined and found in each other partners and protectors.”