PPE corruption scandal unmasked in South Africa

South Africans donated billions of dollars to protect key workers. But with bank accounts frozen and sports cars seized, questions are being raised about where the money went. 

What started as a rallying call for South Africans to stand together against the onslaught of the coronavirus pandemic, quickly disintegrated into a morass of bureaucratic bungling, corruption and outright looting involving multi-million-dollar tenders allegedly awarded to politically connected individuals tasked with supplying personal protection equipment (PPE). 

In March, South African President Cyril Ramaphosa addressed the nation regarding the Covid-19 pandemic.

He called on the people to be resolute and firm and to support the government’s decision to declare a national state of disaster, and lockdown the country for three weeks.

He also announced the creation of the Solidarity Fund – with an initial R150 million ($8.7m) from the state – to deal with the coming Covid-19 storm.

The speech, delivered with gravitas and frankness, shifted even his most fervent detractors, and the money poured in.

The families and businesses of the Oppenheimers, the Ruperts and the Motsepes immediately committed R1 billion ($58m) each.

Online internet giant Naspers kicked in R1.5 billion ($87.5m). Two-thirds of the cash was used to source, procure and distribute PPE and the remaining third paid directly into the fund.

Within weeks, the fund had attracted $30bn, and within six months some $142m had been disbursed on what the fund listed as ‘interventions and projects across three key pillars – Health, Humanitarian Relief and Behavioural Change’ – with huge sums spent to provide PPE for frontline health workers.

As the country moved into ever-decreasing alert levels, the regulations surrounding the lockdown became submerged in illogic and nonsense.

Retailers could sell T-shirts, but only if they were to be worn under a jacket; they could not sell open-toed sandals; the Department of Trade, Industry and Competition even placed absurd restrictions on e-commerce shopping.

There were rumours of fierce battles within the National Coronavirus Command Council (NCCC), headed by Cooperative Governance Minister Nkosazana Dlamini Zuma. 

The mood of the country shifted from determination and support to anger and disillusionment.

Then stories began to trickle in about the PPE contracts.

In April, the province of Gauteng’s Health Department’s Supply Chain Chief Director, Thandy Pino – just two weeks into her position – apparently warned her department head, Mkhululi Lukhele, and the Chief Financial Officer, Kabelo Lehloenya, that the department wasn’t complying with National Treasury procurement guidelines for Covid-19 PPE.

The amount involved was around R2bn ($116m).

A month later, Lehloenya resigned, and Pino was suspended while the SIU investigates her role in the tender awards. 

But the alarm bells went off in July when presidential spokesperson and confidant Khusela Diko was placed on leave following revelations that her husband, king of the amaBhaca people Thandisizwe Diko, had secured a $2.75m PPE contract.

By the end of July, the deal – which Diko withdrew from – along with more than 90 other tenders issued by Gauteng’s Department of Health, was being investigated by a nine-institution unit headed by the Special Investigating Unit (SIU).

The SIU was set up by the President on July 23 to deal with allegations of PPE corruption.

The probe into Khusela Diko, which includes the Gauteng health minister, Dr Bandile Masuku, and his wife, councillor Loyiso Masuku, has yet to be resolved, despite a marathon two-day hearing held mid-September. 

Questions really began to be raised, though, when a young businessman by the name of Hamilton Ndlovu posted a video showing him taking delivery of five luxury vehicles – three Porsches, a Jeep and a Lamborghini Urus SUV – worth roughly $645,000.

Ndlovu, who runs an ‘engineering solutions’ company, reportedly secured a $7.3m PPE contract in the Eastern Cape province.

At the time of going to press, Ndlovu’s bank accounts had been frozen and three of the cars seized pending an investigation. 

By mid-September, the SIU was investigating more than 658 PPE tenders and other pandemic-related contracts worth around $300m.

Meanwhile, Brig Hangwani Mulaudzi, spokesperson for South Africa’s elite anti-corruption unit the Hawks, confirmed officers were investigating more than 50 cases regarding substandard or falsified PPE.

This investigation followed on reports from the South African Bureau of Standards (SABS), which revealed that approximately 60 per cent of the medical-grade masks it tested did not meet its quality criteria. 

Ironically, the Hawks are also involved in investigating themselves after it came to light that four contracts worth $31.6m to supply the police with PPE were under investigation. 

The rot seems to be widespread. In the province of KwaZulu-Natal, the SIU is looking into the Department of Education and the Department of Social Development’s PPE contracts respectively valued at $28m and $1.25m. 

According to a report issued by the Auditor-General, Kimi Makwetu, the items were ‘priced at more than double, or even five times, the prescribed price’.

It goes on to say: ‘There are clear signs of overpricing, unfair processes, potential fraud and supply chain management legislation being sidestepped’.

The Auditor-General’s final report is expected in November.

It will be his swan song, as his seven-year term of office comes to an end. 

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Lungu under pressure

  • Published in Zambia

Corruption allegations, stalled economic growth and friction from within his own party are making life at the top hard for Zambia's President Edgar Lungu

ELECTIONS IN Zambia are three years away but the political temperature has already reached fever pitch. Just when the ruling Patriotic Front (PF) party was sighing relief over the stalled presidential petition filed by the opposition United Party for National Development (UPND) challenging the outcome of the 2016 elections that saw Edgar Lungu returned to power, it has found itself on the back foot again following a series of corruption allegations.

They were reignited by the resignation in January of foreign minister Harry Kalaba, who denounced the country’s “swelling” levels of corruption, saying they were being “perpetrated by those who are expected to be the solution”.

The MP for Bahati, a constituency in Luapula Province in northern Zambia, also said that the PF had failed to honour its campaign promises as the majority of the population was still living in abject poverty.

In 2016, Zambia was rocked by the sacking of minister of information and broadcasting services Chishimba Kambwili for graft. His departure came amid claims that the government had acquired 42 fire-tenders and ambulances at inflated prices.

As the country’s anti-corruption agency opened an investigation into him, Kambwili, MP for Roan in Luanshya, a mining town in the Copperbelt, advised it to take a closer look at the president.

In February Lungu’s critics said he appeared to be sanctioning corruption when he quoted the local proverb ubomba mwibala, alya mwibala, alya mwibale lyakwe, which loosely translates as ‘you may eat from the field but do not finish the seed’. In other words, you may steal, but not too much.

Although Lungu’s supporters say his words have been mischievously misinterpreted, the exit of Kambwili, who is consultant for the new opposition party, the National Democratic Congress (NDC), and Kalaba’s resignation are undermining the PF’s popularity in the Copperbelt and the Northern Province, its main power bases.  

President Lungu reacted swiftly to maintain the PF’s influence here and also in Muchinga Province by reshuffling his cabinet. He has removed Felix Mutati from the ministry of finance, replacing him with Margaret Mwanakatwe, who until her appointment was minister of commerce, trade and industry. Against a backdrop of concern about the country’s rising foreign debt, it is reckoned that Mwanakatwe will enjoy more authority than her predecessor, who was always considered an outsider since his co-option from Movement for Multiparty Democracy (MMD), one of the PF’s coalition partners and erstwhile governing party from 1991 to 2011.

Zambia’s external debt as at end-May 2017 increased to $7.2bn from $6.9bn in December 2016 on account of new loans that have been accrued.

The country is desperate for an International Monetary Fund (IMF) bail out but the lending agency has put its much anticipated $1.3bn loan deal with the Zambian government on hold.  

IMF communications director Gerry Rice confirmed that the negotiations with Zambia have been suspended due to the extent of government borrowing. It is hoped that Mwanakatwe’s background as a respected accountant and banker may persuade the IMF to return to the table. However, analysts feel that is more a question of whether she has the appetite for an IMF bail out programme than the IMF’s misgivings about Zambia’s debt mountain.

Nevertheless, a firm decision about the IMF package must be made in the coming weeks as the uncertainty around the deal is damaging the country’s credit rating. If it goes ahead, it is thought other donors will be more willing to

support Zambia’s economic recovery plan.

Meanwhile, the UPND created a stir when it criticised the red carpet welcome given in February to Democratic Republic of Congo leader Joseph Kabila, who it said had broken his country’s constitution by overstaying his office.

 The UPND has now turned its heat on the PF even more by proposing a vote-of-no-confidence against President Lungu in parliament for violating his own constitution, with a number of PF parliamentarians likely to cross the floor in support. At least 21 PF MPs and five independents have so far said they will back the impeachment move.

According to sources from within the UPND and the NDC, the rebel PF MPs feel betrayed by Lungu for appointing MMD members in key ministerial and party positions.

Kambwili appears to be having the last laugh. His supporters claim that Lungu is now serving the wishes of former president Rupiah Banda and newly-appointed minister of information and broadcasting services Dora Silya than the PF rank and file.

Talk of dialogue between President Lungu and main opposition leader Hakainde Hichilema has been heightened with Commonwealth special envoy  Ibrahim Gambari suggesting that a committee of eminent persons should be put in place to spearhead it.

Gambari has been to Zambia on several occasions following Commonwealth secretary general Patricia Scotland’s visit to the country during Hichilema’s controversial imprisonment in 2017 for treason after his motorcade failed to give way to one transporting Lungu.

Scotland’s visit was preceded by former Nigerian President Olusegun Obasango’s trip to Zambia to put more pressure on President Lungu, who was widely condemned for Hichilema’s arrest and accused of behaving in a dictatorial manner.  

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