South Africa Investigates Alleged $7 Billion of Corruption at State-Owned Companies

South Africa’s Special Investigative Unit (SIU) is actively looking into alleged corruption totaling more than $7 billion at some of the nation’s top state-owned companies.

The country’s anti-graft unit has been running some of these investigations since 2018, and the SIU provided a status report to a parliamentary committee this week about the probes.

The investigations involve six state-owned businesses: ports and rail company Transnet; arms company Denel; power utility Eskom; the National Lotteries Commission; South African Airways, and passenger rail company PRASA. At Transnet alone, the SIU is investigating around 60 suspicious contracts, hundreds of cases of conflicts of interest, and other corruption allegations worth more than $4 billion of public money, the Associated Press (AP) reported.

Corruption and graft have plagued South African companies for years, especially where government contracts are concerned.

“A judicial inquiry into high-level corruption during that era implicated numerous government officials and executives at state-run businesses in taking kickbacks and bribes from businessmen in return for government contracts or favors,” the AP reported. “The culture of graft permeated through all levels of government, according to the allegations. Hardly any of those implicated have faced criminal charges.

“It had devastating impacts on South Africa’s economy, including the near collapse of its electricity supply because of graft and mismanagement at power utility Eskom, a company at the heart of many of the scandals,” the article continued. “South Africa was plunged into record levels of nationwide blackouts last year because of the crisis at Eskom.”

Last year, there were power cuts in South Africa on 335 days, significantly affecting businesses’ ability to operate, Reuters reported.

At PRASA, investigators believe $540 million was lost to corruption when money was stolen through payments made to more than 1,200 nonexistent employees.

In 2023, the SIU released an interim report about its work investigating corruption at South African Airways, including unusual or unlawful actions during procurement processes and contract negotiations.

“The SIU found that some of the Board members benefited from the corrupt payments facilitated by at least two legal firms,” the report said.

Although current South African President Cyril Ramaphosa pledged to clean up the government and punish people responsible for corruption schemes, anticorruption experts say it is unlikely that much of the money will be recovered.