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This resource is hosted by the Nelson Mandela Centre of Memory, but was compiled and authored by Padraig O’Malley. It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.

Spousal capitalism

editorial M&G
27 May 2004 23:59

This week the Mail & Guardian throws a harsh spotlight on the growing practice of politicians' spouses and other immediate family members landing fat government contracts to found and build their private businesses.

The African National Congress sees nothing problematic in the practice, arguing that spouses are private citizens with constitutionally guaranteed rights to pursue an occupation, and that nothing more is required than compliance with tender procedures, and declaration and self-recusal when there is a conflict of interests. An underlying sentiment is that politically connected spouses should not be excluded from the general policy of "affirmative procurement", in terms of which aspiring black entrepreneurs get a leg-up from state tenders.

Unfortunately, matters are more complicated than that. As Public Service Accountability Monitor director Colm Allen points out, tender boards are not entirely immune from political pressures, as their members are themselves appointed by the government.

In the case of the Eastern Cape, Allen points to the obvious anomaly of a tender board being asked to adjudicate a contract bid by the premier's wife, when the premier has a role in deciding the board's composition. In addition, Cabinet members are intimate associates and, for the most part, senior members of the same party. In this context, it makes little sense to distinguish between contracts awarded by a department under a spouse's direct control and one under the control of a spouse's colleague.

The larger issue is the growth of "crony capitalism" in South Africa. This implies the use of political and government connections to secure private business opportunities. The obvious dangers are that transparency in state procurement is lost, that the taxpayer is cheated because government work goes to political cronies rather than to deserving suppliers, that government policy and spending priorities come to reflect private business interests rather than the public good, and that a political-business caste emerges with enormous and partly unaccountable power.

South Africa's regulation of this area clearly needs to be tightened. There is much merit in the suggestion of Hennie van Vuuren, of the Institute of Strategic Studies, that the immediate relatives of executive members of government should simply be barred from doing business with the state.

This resource is hosted by the Nelson Mandela Centre of Memory, but was compiled and authored by Padraig O’Malley. Return to the Nelson Mandela Centre of Memory site.