Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI


Jacob Zuma

South Africa: DA to Submit a PMB Forcing Transparency On Arms Deals


Tomorrow the Arms Procurement Commission begins public hearings into what appears to be the biggest corruption scandal in the history of South Africa.

One of the effects of the arms deal scandal was to destroy any scrutiny and oversight of future arms deals by Parliament.

Stung by the political fallout from the arms deal scandal, the Defence Department now refuses to disclose any detailed information about armaments acquisition to Parliament.

There is a complete lack of transparency on current Defence Department armaments acquisition programmes.

The fact is that we know less about arms deals now than we did a decade ago.

The Defence Department’s White Paper on National Defence for the Republic of South Africa (1996) requires the department to:

“… publish an annual Acquisition Master Plan to indicate all new acquisition projects required for political approval from the minister and to inform the Joint Standing Committee on Defence“; and

“… publish a medium-to-long-term Defence Requirements Statement to guide long-term technology and industrial planning”.

Moreover, the Defence Department’s Defence Material Division’s Policy, Process and Procedures for the Acquisition of Armaments in the Department of Defence (“DAP 1000”) is very clear about parliamentary oversight stating:

“The relevant parliamentary committee(s) on defence will have an oversight function to provide guidance to the DOD with respect to the relevant facets of its acquisition programmes. The oversight function will include guidance to the DOD with respect to timing of tenders, counter trade obligations, and acquisition prioritization. The DOD will submit bi-annual and ad hoc reports to the relevant Committee on Defence on all acquisition activities. The DOD will keep the relevant Committee on Defence abreast of developments in all its cardinal acquisition programmes, and will inform the relevant Committee on Defence at all relevant stages of such acquisition.”

However, for at least the past four years, the Defence Department has failed to produce any of these reports.

South Africa: Mbeki, Manuel to give evidence in arms probe

The Citizen

July 16th, SAPA

Former president Thabo Mbeki will testify as a witness in the first phase of the Arms Procurement Commission, it was announced.

The commission, which is probing the R70 billion arms procurement deal, will hold public hearings from August 5 until January 31, subject to President Jacob Zuma granting an extension beyond November, spokesman William Baloyi said in a statement on Monday.

Mbeki and Minister in the Presidency Trevor Manuel were set to testify in the second half of January.

Baloyi said the first phase of the commission would “deal with the rationale for the Strategic Defence Procurement Package”, and whether the arms and equipment acquired were under-utilised or not utilised at all.

The first witnesses would be navy and air force officials. Armscor witnesses would be named later.

Former Intelligence Minister Ronnie Kasrils and Congress of the People president Mosiuoa Lekota would be called as witnesses between September 30 and October 4, followed by department of trade and industry officials until November 11.

Former Public Enterprises Minister Alec Erwin was expected to testify for three days in November, followed by National Treasury officials until the end of that month.

“It is also important to note that the programme is not cast in stone and circumstances prevailing at the hearings may require that it be adapted or altered, and this may also effect the sequence of witnesses,” Baloyi said.

“Some of the witnesses may be recalled at a later stage, when the commission deals with the terms of reference relating to allegations of impropriety, fraud and corruption in the acquisition process, a phase in which the ‘whistleblowers’ and those who are implicated will feature.”

The commission would be held in the council chambers of the Sammy Marks Conference Centre in Pretoria.

The deal, which was initially estimated to cost R43 million, has dogged South Africa’s politics since it was signed in 1999, after then Pan Africanist Congress MP Patricia de Lille raised allegations of corruption in Parliament.

Zuma himself was once charged with corruption after his financial adviser Schabir Shaik, who had a tender to supply part of the requirements, was found to have facilitated a bribe for him from a French arms company.

The charges against Zuma were later dropped.

South Africa: Procurement of VIP planes canceled

July 6th, 2012

Cape Town – Announcing the cancellation of R2bn jet deal for President Jacob Zuma, Defence Minister Nosiviwe Mapisa-Nqakula said there is a need for VIP planes and a new procurement process can be expected.

The proposed purchase of a new Boeing 777 jet for President Jacob Zuma will not go ahead, Mapisa-Nqakula said on Friday.

She told reporters in Pretoria the procurement process was cancelled after the offer to purchase lapsed on June 15.

A $10m (about R82m) deposit would be returned in full, the minister added.

The ministry confirmed that there was also an offer from Airbus but that this lapsed two weeks later, on June 30.

“I have since met with the companies approached to submit proposals for the procurement of VVIP aircraft, including Boeing, and I have informed them that the current process has been cancelled.”

The minister said a new procurement process could be expected in the future because there was a need for VIP planes.

Mapisa-Nqakula said the process involving Boeing was being probed by Public Protector Thuli Madonsela.

She declined to say whether the regular procurement requirements had been followed, pending the outcome of that investigation.


South Africa: Police chief Bheki Cele fired by President Jacob Zuma

Global Post

By Eric Conway-Smith

June 12, 2012

Bheki Cele, suspended over allegations of dodgy property deals, has been replaced by Mangwashi Victoria Phiyega, South Africa’s first female police commissioner.

JOHANNESBURG, South Africa — Bheki Cele has been fired as top police chief, South African President Jacob Zuma announced today.

Cele, suspended last year after allegations of unlawful property deals, has been replaced by Mangwashi Victoria Phiyega. She is South Africa’s first female national police commissioner.

Cele’s dismissal comes amid growing frustration in South Africa over corrupt and incompetent police, from traffic cops soliciting a bribe to the controversial appointments of some of the country’s highest-ranking police officials.

A board of inquiry last month found that Cele was not fit to hold office, and recommended he be dismissed.

“I have decided to release General Cele from his duties,” Zuma told reporters in Pretoria.

Allegations about Cele’s property deals were first reported in South Africa’s Sunday Times newspaper, on August 1, 2010.

A corruption investigator ruled last year that Cele and a government minister were involved in property deals that were “improper, unlawful, and amounted to maladministration.”

Public protector Thuli Madonsela investigated leases for buildings that were to have served as police headquarters in Pretoria and Durban, and found that the buildings were leased from a well-connected company at inflated prices.

She slammed Cele for his involvement in the deals, and called for disciplinary action against him by President Zuma.

In the Durban deal, police had offered $169 million to a politically connected property tycoon for a 10-year lease that was worth less than one third of that amount.

Cele’s predecessor, Jackie Selebi, is serving a 15-year jail sentence for corruption after being convicted of taking $156,000 in bribes from drug dealer Glenn Agliotti.

South Africa: Government releases its Mid Term Review

7th Space

Compiled by the Government Communication and Information System
Jun 1, 2012

Pretoria – Government has officially released its Mid Term Review Report, which provides progress on the implementation of the commitments it has made.

November 2011 marked the mid-point of the 2009-2014 electoral term of the current administration and in line with that, the Department of Performance Monitoring and Evaluation carried out a Mid Term Review of government.

The report was released by Minister in the Presidency Collins Chabane, in Pretoria, on Friday.

The review focuses on government’s progress against the delivery agreements for the 12 outcomes. The outcomes are focused on national priorities such as education, health, crime and corruption, jobs and rural development.

The Department for Performance Monitoring and Evaluation has been monitoring progress on the implementation of the delivery agreements for the outcomes and reporting quarterly to Cabinet and the President.

Speaking about government’s priority of creating jobs, Chabane said although sufficient jobs were not created to meet the demand, government has made significant advances in the coordination of growth strategies, the New Growth Path and Stakeholder agreements.

“We have made progress with labour absorbing industrial development strategies in manufacturing, mineral products, procurement reform and the Jobs Fund. We have also made progress with improving competitiveness and reducing costs in minerals beneficiation, automotives and clothing.”

According to the report, significant procurement reforms to promote employment were achieved in 2011 with South Africa recording possibly up to 350 000 jobs in the course of the year.
However, the report notes, employment levels were still below those of 2008, before the recession with the current employment ration still well below the modest target of 45% by 2014.

The report notes that the Jobs Fund, announced by President Jacob Zuma last year, had committed only R425 million of its R2 billion budget for 2011/12.

The task of coordinating job creation initiatives across departments has proven to be challenging, resulting in slow implementation of decisions, especially where complex coordination is involved.

The report cites the problem of youth unemployment as among serious challenges facing the country.

“Government is taking a multi-pronged approach to youth employment. In addition to plans to stimulate higher growth that supports more entry-level employment opportunities, the strategy includes improved and affordable education, especially for young people from poor households; expansion in further and higher education and training; improved health care, with targeted programmes on teen pregnancy; early childhood development; and HIV and AIDS and career guidance and counselling,” reads the report.

It said a youth employment incentive, which is currently under discussion at the National Economic Development and Labour Council, had been proposed.

The National Youth Development Agency (NYDA) was in the process of finalising the National Youth Development Plan and the Integrated Youth Development Strategy for Cabinet, which focus on employment creation and economic participation by the youth. NYDA is said to have helped create 18 048 jobs in 2010/11.

During his State of the Nation Address earlier this year, President Zuma announced that the Industrial Development Cooperation (IDC) had by February this year approved R1.5 billion for 60 companies to promote job creation. This was part of the R10 billion set aside by the IDC for job creation.

With regard to increasing competitiveness, the report points to definite progress in the implementation of the Industrial Policy Action Plan (IPAP), and jobs drivers in some sectors, including minerals beneficiation, autos and clothing.

It highlights key developments in green growth through the implementation of a solar water heater programme and through commitments on renewable energy in the independent power producer (IPP) process.

Over 8 500 solar geysers were installed across South Africa during the two-week UN climate summit held in Durban with government targeting one million homes by 2014.

Reported by: South African Government News Service.

Why a South African Anti-Corruption Agency Must be Independent of the Police to be Effective

Institute for Security Studies

May 2, 2012

By Gareth Newham,  Head of the Crime and Justice Programme, ISS Pretoria

If it was not already clear why a dedicated anti-corruption agency capable of tackling powerfully connected people had to be independent of the South African Police Service (SAPS), the recent, and indeed ongoing failures of police leadership over the past few years should put this into perspective.

In 2010, ex-SAPS National Commissioner Jackie Selebi was convicted on corruption charges and sentenced to 15 years in prison. In 2011, the SAPS National Commissioner, Bheki Cele, was suspended pending the outcome of an inquiry into his fitness for office. This followed a finding by the Public Protector that his actions in relation to a R1.67 billion police lease deal were ‘improper, unlawful and amounted to maladministration.’

In addition, one of the most powerful SAPS Divisional Commissioners, head of Crime Intelligence Lieutenant-General Richard Mdluli, is facing an astonishing array of allegations implicating him and his close colleagues in murder, rape and wide-scale corruption.  The National Minister of Police, Nathi Mthethwa has been accused of halting the Hawks’ investigation into Mdluli so as to protect him from further criminal charges, given Mdluli’s willingness to use his position to support Jacob Zuma’s intention to run for a second term as ANC president. Moreover, there are allegations emerging from investigations by the Hawks that Mthethwa illegally benefitted from the SAPS Secret Service Account to the tune of R195 581 for renovations to his personal residence, which was authorised by Mdluli.

Whether or not these allegations are ultimately proven, they have certainly severely undermined the public image of the police and further demoralised many of the honest hard working police officials expected to place themselves at risk in fighting crime.  Moreover, such allegations point to reasons why the political elite might choose not to strengthen the independence and ability of the Directorate of Priority Crimes Investigations (DPCI), commonly known as the Hawks, to investigate corruption committed by those at the highest levels of government…Read more.

Chinese help Patel

Business report,

By Donwald Pressly

April 29, 2012

It is all about a masterplan called the developmental state where the various spheres of government and their agencies will work together to fast-track job creation, grow the economy and strip away any state fat in the process.

This is the vision for the country that Economic Development Minister Ebrahim Patel pursued during his budget vote in Parliament last week.

Earlier this year Patel, during the debate on the State of the Nation speech, noted that President Jacob Zuma had outlined a R1 trillion infrastructure plan that represented “a bold, strategic and integrated platform” to mobilise the state – with private investors and the South African public – behind “a clearly articulated storyline of South Africa’s opportunities”.

Last week Patel continued the storyline.

It was a week in which he announced a major deal with China, an expanded mandate for the Industrial Development Corporation (IDC) including the launch of a new subsidiary – the Small Enterprise Finance Agency (Sefa), which will focus on providing loans to small business. He reported the agency would have R2 billion in the lending kitty provided by fiscal transfers and reserves, and just short of a R1bn shareholder loan from the IDC.

In addition, the IDC had issued a R4bn jobs bond to promote lending to companies in a bid to boost job creation.

He noted that the IDC had introduced low-cost lending facilities for jobs creating projects “at prime less 3 percent”.

In the last year, IDC funding approvals had grown from R8.8bn to R13.5bn.

Ahead of his budget vote, Patel signed an agreement between the China Development Bank and the IDC. The bank will commit $100 million (about R777m) in funding for small business, which will be disbursed through the newly set up Sefa.

The latter is the amalgamation of three state finance agencies, which Patel emphasised would save about R20m just in reducing administrative red tape costs.

The Chinese loan will be repayable over 10 years and was the first “concrete partnership” arising from the Beijing declaration signed between South Africa and China in 2010, when Zuma went there on a state visit….Patel said the integrated platform required to mobilise South Africa’s talent and expertise was the first step in creating a 10- to 20-year infrastructure project pipeline.

His department took into account “the growing experience” in the state build programme for the Gautrain, Medupi and Kusile power stations, the freeway improvement programme and the major airport revamps.

He told journalists that the current procurement system of government was “purely transactional”. For example, his department had discovered that the file in which a recent speech was stored – on the need to buy South African products – was produced by a German company. These files were the cheapest.

After consultation with a local stationary company, Bantex, the Department of Trade and Industry and Economic Development were using local files and saving R100 000 a year. On top of it Bantex was getting the business and the new arrangement supported local jobs.

Turning to an expanded role for the IDC, he hinted that the corporation which had until now provided funding off the strength of its balance sheet, may turn to the state in future to make “contributions”.

The IDC, nevertheless, reported that it would be spearheading an over R100bn infrastructure investment programme over the medium term off its balance sheet.

Meanwhile, Patel acknowledged that the government had learnt a lesson from the massive bus rapid transport system procurement in the cities of Johannesburg and Cape Town, where they had separately procured buses from Brazil without benefiting from the economy of scale of having one bid. Long-term and pooling procurement procedures were the way to go, Patel argued.

Patel reported to MPs that of the R672m budget of his department, just short of R170m would be channelled to Sefa, which he said would help improve small business performance and strengthen its direct lending capability, while increasing disbursement.

To promote agriculture processing activities, Patel reported that R108m would be earmarked for the IDC for the agro-processing fund.

He also announced that the Public Investment Commission would manage a R5bn green bond issued by the IDC. It would have a 14-year tenure. Read the full article here.

Dogged arms deal critics up the ante

IOL News

January 2012

By Ivor Powell and Marianne Merten

While President Jacob Zuma’s Commission of Inquiry into the arms deal gears up for business, two key critics of the weapons procurement scandal are busy upping the ante.

The Sunday Tribune has learned that the DA’s David Maynier intends to call on Zuma to extend the already wide-ranging terms of reference to include a focus on alleged attempts by government officials to stymie past investigations.

And civil society crusader Terry Crawford-Browne moved in the new year to secure expert advice on the legality and constitutionality of the government’s justification of the weapons procurement programme of the late 1990s on the basis of presumed economic benefits via arms deal offsets.

Crawford-Browne this week told the Tribune that if the legal experts found that the government’s justification of the deal on the basis of offsets was flawed from the beginning, he would move to have the entire arms deal repudiated and declared “unfixable”.

“At issue then for the Commission’s consideration,” Crawford-Browne argued, “will be a public and tangible apology to the people of South Africa by way of cancelling the contracts, returning the warships and warplanes, and repudiating the foreign loan agreements – signed by (then Finance Minister Trevor) Manuel – as fraudulent.

“The financial consequences will then fall to the British and German taxpayers who have guaranteed these loans, which South Africa has not yet repaid and which run until 2019.”

The basis of Crawford-Browne’s intervention lies in Section 217 (1) of South Africa’s constitution. The subsection requires that all government procurements are conducted “in accordance with a system which is fair, equitable, transparent, competitive and cost-effective”.

It was also on this basis that Crawford-Browne, in 2010, approached the Constitutional Court to rule on the basic legality of the arms deal.

This was after Crawford-Browne was told by then President Kgalema Motlanthe in December 2008 that there was no need for any inquiry.

It was in the fallout from Crawford-Browne’s Concourt action, as the court deadline loomed for Zuma to defend the procurement programme, that in September 2011 he shifted the goalposts to announce that he was instituting a commission of inquiry into the scandal.

Explaining his current initiative, Crawford-Browne noted that, as approved by Parliament, the rationale for entering into the Strategic Defence Procurement Programme was “indisputably, R30 billion spent on armaments would generate R110 billion in offsets to create over 65 000 jobs” – none of which has happened.

Crawford-Browne also highlights the fact – exhaustively canvassed in researcher Paul Holden’s recent book The Devil in the Detail – that “every cabinet minister was repeatedly warned by civil society representatives that offsets are internationally notorious for corruption”.

In particular, Crawford-Browne drew attention to then “Deputy President Thabo Mbeki (with a masters degree in economics), Trade and Industry Minister Alec Erwin and Finance Minister Trevor Manuel”, who, Crawford-Browne charges, “then abused the powers of public office to squelch investigations into the bribes and corruption that the arms deal unleashed. In so doing, they were either criminally naive or criminally complicit.”

As revealed in a series of articles, the actual performance of weapons manufacturers in terms of offset obligations arising from the arms deal has been dismal at the very least, and the entire process riddled with corruption that has been exposed in the course of corruption investigations in Sweden, Germany and the UK. – Sunday Tribune

South Africa may be sanctions-busting hub for Iran, warns DA

The Witness

by Rajaa Azzakan

May 15th, 2012

CAPE TOWN — The Democratic Alliance warned yesterday that South Africa may be used as a route to get parts for military helicopters in Iran.

Lindiwe Mazibuko, DA parliamentary leader, yesterday told the Cape Town Press Club this was totally against a resolution of the United Nations.

At the same time she praised Deputy President Kgalema Motlanthe for his request that the Public Prosecutor investigate bribery allegations against his life partner, Gugu Mtshali.

She said Motlanthe showed much needed political will to get corruption investigated independently.

The Sunday Times reported that Mtshali was allegedly involved in an attempt to get a bribe of R104 million in exchange for government support for a South African company to get a contract to supply Bell helicopters and parts to Iran.

Mtshali, Raisaka Masebelanga and other associates of Motlanthe reportedly met in February last year in Johannesburg with representatives of 360 Aviation to discuss the buying of government support for a contract with Iran, which would be worth some R2 billion.

The report stated that Barry Oberholzer, chief director of 360 Aviation, said Mtshali and company wanted R10 million up front as a consultancy fee as well as shares worth some R94 million.

A front company, which would have been registered by 360 Aviation, would have supplied American Bell helicopters and parts to the the National Iran Oil company.

Mazibuko warned that the larger picture — that South Africa could be used as a route to supply parts for Iran military helicopters — should not be lost sight of.

She said Motlanthe’s fast reaction was in stark contrast with the delays involving investigations into South Africa’s arms deal, which have been dragging on for years.

Mazibuko will ask President Jacob Zuma in the Assembly today if the full report by the commission of inquiry that he ordered into the weapons transactions will be made public and whether any action will follow against those involved.

Regarding Cosatu’s refusal to meet the DA, Mazibuko said the labour federation was not serious about helping to solve the issue of joblessness among South Africa’s youth.

She said it seemed the trade union was placing petty party politics ahead of SA’s interests.

Blog at

Up ↑

%d bloggers like this: