S. Africa Must Fix Public-Fund Theft, Finance Ministry Says

(Bloomberg) -- South Africa needs to urgently address the theft of funds from state companies and departments and rebuild trust in public institutions, which had been badly damaged during the previous administration, the head of the finance department said.

“There are many times when public servants turned a blind eye over the past few years -- we should take a stand and not be forced to do that which is unlawful,” Director-General Dondo Mogajane told reporters Wednesday near the capital, Pretoria. “If there is wrongdoing, we should deal with it or at least speak against it. We know it’s not easy especially for public servants in provinces.”

Slow economic growth and years of mismanagement at some state companies and municipalities have weighed on government revenue and stretched the nation’s finances. Delinquent cities owe utility companies such as power provider Eskom Holdings SOC Ltd. billions of rand, worsening their ability to deliver services.

President Cyril Ramaphosa appointed a judicial commission to investigate allegations that members of the Gupta family and their allies connived with the new leader’s predecessor, Jacob Zuma, and his son Duduzane to loot billions of rand from state coffers. Its success or failure will go a long way in determining whether South Africa can emerge from the plunder during Zuma’s scandal-ridden administration that undermined investor confidence and stymied economic growth.

South Africa “dare not relax” amid improved sentiment in the Ramaphosa era, Deputy Finance Minister Mondli Gungubele said. While the new president has ushered in a new dawn to restore good governance, the government must work to restore trust between the state, the private sector and investors, he said.

©2018 Bloomberg L.P.