By Anine Kilian
First published on Engineering News

There are a multiplicity of factors that drive corruption in both public and private institutions throughout South Africa, nongovernmental organisation Corruption Watch chairperson Mavuso Msimang said on Tuesday.

Addressing delegates at the ninth Chartered Secretaries Southern Africa Corporate Governance conference, in Johannesburg, he highlighted that, in the public sector, where corruption had been manifesting for a long time, people occupied key positions without having a competent understanding of their jobs.

“Incompetence plays a major role towards institutionalised corruption,” he said.

He noted that there were many challenges in corporate governance regarding corruption, pointing out that, through fraudulent conduct in both public and private enterprises, a lot of money was being diverted away from people, particularly the most vulnerable in society.

“People’s health and education are being compromised because funds that should go into schools and hospitals don’t get there. People suffer because of misconduct,” he said.

Msimang stated that a corrupt regime was less likely to attract the same investments that well-run countries did.

He said countless studies around the world showed how corruption had the potential to interrupt investment, restrict trade, reduce economic growth and distort the facts and figures associated with government expenditure.

But the most alarming studies, he noted, were the ones directly linking corruption in certain countries to increasing levels of poverty and income inequality.

“When there is rampant corruption, investors can’t be sure that their contracts will be honoured; they don’t know if they are safe,” he explained.

He noted that South Africa being bumped off from its long-standing top spot regarding investments in Africa by Egypt, according to Rand Merchant Bank’s latest Where to Invest in Africa report, was testament to the negative impact institutionalised corruption could have on a country.

Msimang said South African society was severely affected by corruption. “It is so pervasive and commonplace that people seem to give up, they think they need to be corrupt to get ahead.”

Msimang, meanwhile, said auditing firm KPMG, which on Friday withdrew the findings of a report it authored on a so-called South African Revenue Service “rogue unit”, may collapse as an entity, adding that if other corporates understood that corruption could lead to their demise, it would be a good lesson.

“KPMG should be made an example of,” he said.

Msimang noted that people who were involved in state capture should, after following due process, be given custodial sentences so that they don’t pay fines with money they have stolen.

“They need to be put in prison so that future potential corruptors will be deterred,” he said, comparing the potential effect within the state to what he hoped would be the result of the KPMG developments.