Is South Africa Becoming a Failed State?
Until recently, I never thought that I would have to write these words: I live in a failed state. South Africa has become so corrupt that the state could soon be bankrupted through outright theft and graft.
Over the last year or two, there have been constant revelations about public-assets looting by the (ex-terrorist) ANC regime. In 2018, a liberal journalist, Stefan Hofstatter, published a book called Licence to Loot: How the plunder of Eskom and other parastatals almost sank South Africa (Penguin, 2018, also on Kindle). Hot on its heels has come another book by Pieter Louis Myburgh, who used to write for the Afrikaans Sunday paper Rapport, called Gangster State (Penguin, 2019) with a focus on the web of corruption around the ANC secretary-general, Ace Magashule.
In Licence to Loot, Hofstatter painstakingly recounts how the infamous Gupta family from Saharanpur, India, bribed itself right to the top, eventually controlling both the now-former president, Jacob Zuma, and Brian Molefe, the CEO of our largest utility, the electricity supplier Eskom.
Due to political infighting, Eskom’s position of CEO became something of a revolving door, as one conniving black mogul was ousted and replaced by the next—though with an uninterrupted flow of contracts and kickbacks changing hands.
A young Afrikaner engineer who studied with a scholarship from Eskom and now works at one of the utility’s power stations once told me: “We are relatively good at losing the best people in our organization and retaining the weakest ones, regardless of race.” This would hold true for most of government-run and even corporate South Africa these days; only the most corrupt and venal survive.
One corrupt and venal white is Gavin Watson, a liberal who refused to play rugby in the previously all-white system under the old government and joined an unofficial “multiracial,” leftist rugby league affiliated with the ANC. His “brave stance” ingratiated him with the ANC, and he has benefited hugely, especially from government contracts with the Correctional Services Department. The wheeling and dealing of his company Bosasa has recently been exposed by the so-called Zondo Commission, when some of his former employees testified they were told to deliver bags full of cash to politicians and bureaucrats to “keep the machine oiled.”
Ironically, the whistle-blower, Angelo Agrizzi, has been indicted, but Gavin Watson has suffered no criminal sanction despite days of testimony about his company’s corruption. South African banks were embarrassed by the revelations, however, and closed the company’s accounts. Mr. Watson put Bosasa into voluntary liquidation in February, but it continues to trade under other names.
Atul, Ajay and Rajesh “Tony” Gupta eventually fled South Africa to Dubai after a wave of negative publicity about their business empire, but they took approximately R50 billion (about $3.5 billion) of loot with them. An international search warrant for their luxury Bombardier jet—financed by the Export Development Canada—finally led to its grounding by court order at Lanseria Airport in Johannesburg. The Guptas still owed the Canadian export credit agency $27 million on the $60 million jet.
Although there are still court cases pending, three conclusions can be drawn:
- The Guptas will not return to stand trial.
- The money—laundered through Mid-East and Far-East front corporations—will not be recovered.
- Corruption is pushing South Africa over the fiscal cliff, with state debt growing rapidly, stretching the country’s payment capacity to the limit, and ratings agencies are downgrading its debt to junk or near-junk.
Western legal niceties fall by the wayside as black politicians and their “businessmen” cronies glut their appetites. They are not satisfied with high-paying, affirmative-action appointments; they want to be instant billionaires, or at least millionaires.
The Sunday Times in Johannesburg, for which Mr. Hofstatter often writes, revealed many of the corruption scandals that are often stranger than fiction. On March 26, 2017, its front page ran a Facebook picture of a 26-year-old black girl with the headline: “Billion Rand Babe.” The subtitle: “Eskom lavished deals on boss’s 26-year-old stepdaughter.”
Asked to comment, the then-CEO of Eskom, Matshela Koko, feigned ignorance of his stepdaughter’s deals with the utility, claiming: “She is my stepdaughter from my wife’s previous relationship and she lives with us, but I wasn’t aware that she was a director of this company (doing business with Eskom) until four weeks ago and I asked her to resign with immediate effect.”
Only a few days ago Mr. Koko was again on the front page with this headline: “Koko’s Eskom looting frenzy.” The same company—aptly named Impulse—of which his step-daughter was a director, had paid R81 million (about $5.6 million) into his wife’s bank account.
On the streets of Johannesburg and Pretoria, the proceeds of corruption and embezzlement are visible: thousands of blacks drive $100,000-plus vehicles, frequent clubs and expensive restaurants, and buy European luxury brands. They live in huge mansions designed by white architects in exclusive gated communities or “estates,” as they are called here, with thousands of square feet, wine cellars, three- to five-car garages, swimming pools, etc. It’s a party, or more precisely, an African feast. Whatever happens tomorrow—the economic consequences, the bond downgrades—don’t matter.
Sometimes expensive handbags make headlines, especially when they are used as bribes. During his testimony on corruption at South Africa’s Correctional Services Department, the white whistleblower Angelo Agrizzi told how his boss Gavin Watson had bought an expensive Louis Vuitton handbag for Dudu Miyeni, head of South African Airways at the time. South African Airways had already been looted into bankruptcy and needs regular state injections by the billion to stay afloat and avoid having its accounts frozen by the banks.
Dudu Miyeni knew nothing about airlines, and had no management experience either, but she was a friend of Jacob Zuma’s, the disgraced former president. Some newspapers hinted that she was also his mistress, even though he already had five wives. During her stint as chairman of South African Airways from 2012 to 2017, the state-owned corporation lost billions of dollars, which meant bailouts at taxpayer expense.
The Dudu Miyeni Wikipedia page notes that she once lied about completing a university degree in administration; she has a only teacher’s diploma from an all-black, tribal college. Yet she was appointed to head a major airline with 31.7 billion rand in revenue (slightly more than $2 billion) per year. The last profitable year at South African Airways was 2011, the year before she was appointed:
2010/11 — R782 million profit
2011/12 — R843 million loss
2012/13 — R1.2 billion loss
2013/14 — R2.6 billion loss
2014/15 — R5.6 billion loss
2015/16 — R1.5 billion loss
2016/17 — R5.6 billion loss
2017/18 — R5.7 billion loss
(These numbers were taken from the airline’s annual reports by Wayne van Zijl, a senior lecturer in accounting at the University of the Witwatersrand.)
Newspaper reports describe SAA as “financially crippled” and “bankrupt,” needing at least R31 billion (about $2 billion, equivalent to its annual revenues) over the next two years just to keep flying.
Compared to Eskom, this is pocket change. According to energy expert Ted Blom, the utility will need a government bailout of R200 billion to stay in business. It already owes R420 billion on two new coal-fired mega-power stations that have been plagued by corruption, cost overruns, delays, and even “design faults.” These stations were given “proudly African” names: “Medupi” and “Kusile.” The first is running at one-sixth of its planned capacity, while the second is still not operating. Some believe that the two projects should simply be abandoned and their costs written off.
South Africa used to have the cheapest power in the world. That was back when the United Nations considered us to be “World Enemy Number One” and we had more boycotts against us than Iran or North Korea, mainly from Western nations such as Socialist France, Canada, Jimmy Carter’s USA, the Netherlands (our “mother nation”), and of course the Scandinavian countries that financed outright urban terrorism against us. We had to be energy-independent.
The one thing that we had in abundance, besides gold and platinum, was coal. So the old government and the Eskom engineers built a series of coal-fired stations next to coal deposits, with fuel delivered by conveyor belt right from the mines. We also built the SASOL oil-from-coal factories that partially met our need for gasoline while the oil companies supplied us with the rest from secret sources that slipped through the oil embargo. In the Western Cape, which was far from any coal, we built the Koeberg nuclear generator, using French technology.
Therefore, when Nelson Mandela was sworn in as president in 1994, after whites had been hoodwinked into believing that “everyone will now have equal rights,” South Africa and Eskom had some 16 major power stations that produced a surplus of electricity. No one suspected that within a little more than a decade, we would have blackouts and an energy crisis that gets worse every year.
There were no “design faults” in our older power stations. The collapse of Eskom, South African Airways, the railway company Transnet, the South African Broadcasting Corporation, and other is the result of anti-white animus and corruption.
When the ANC installed its cronies throughout the system, the first thing they did was fire most of the white engineers and replace them with overpaid corporate politicians. They had no technical expertise so they hired foreign “consultants.” The American company McKinsey has fully participated in the corruption and looting at Eskom. Last year McKinsey supposedly “apologized,” and repaid R1 billion ($74 million at the time) to the electricity utility.
McKinsey collaborated with a Gupta-linked company, Trillian, to fleece Eskom of tens of millions of dollars in “consultancy fees.” As recounted in Stephen Hofstatter’s book, the collusion began in 2012, after a golf-course meeting between two Indians, Gupta insider Kuben Moodley and Niven Pillay. Years ago, when I worked in the Standard Bank Treasury in Johannesburg, Mr. Pillay had been there and had won a large bonus doing dodgy deals in the foreign-exchange market, of the kind that sent a few white traders to prison. Later I saw his name crop up as the CEO of City Power, the utility that buys power from Eskom for the city of Johannesburg. I remember thinking that affirmative action can work wonders, even for Indians.
In South Africa’s industrial heartland—the Gauteng province around Johannesburg and Pretoria—Indians have a higher per capita income than whites. They are considered “black” and therefore qualify for affirmative action, so if there is one ethnic group that has really thrived within the ANC’s elaborate anti-white system, it is Indians.
Indians seem to thrive in Africa because they themselves come from a third-world or non-Western country and seem to understand the “greed conquers all” mentality of Africans. As long as you wave a wad of cash—or an anonymous transfer to an offshore, Middle-Eastern bank account—in front of an African, he will do what you ask.
Sometimes, Indians face a backlash. In March, black radical, Julius Malema of the Economic Freedom Fighters (EFF) party accused Indians of “racism,” but recanted only three days later in a speech on the need for unity against whites:
[T]he reason why they [whites] are threatened by unity of Africans, coloureds and Indians, is because they know when we are united we will not be dominated by white monopoly capital. . . . because whether you are Indian, whether you are coloured and you might think you are closer to whites, whiteness doesn’t like you. It oppressed you before, it will forever oppress you.
Anti-white solidarity may not continue forever, but it made Atul, Ajay and Rajesh “Tony” Gupta dollar billionaires. They are rumored to have bribed the minister of home affairs, Malusi Gigabi, to grant them South African citizenship. With dual Indian-South African citizenship and their proceeds from “government business,” the Guptas bought up a whole city block in a posh Johannesburg suburb, Saxonwold, and converted it into the “Gupta compound” of four mansions with enough garages to park their spectacular fleet of Ferraris, Lamborghinis, and Bentleys.
The Guptas’ shady rags-to-riches story even caught the attention of the New York Times, which is usually loathe to criticize our “multiracial utopia.” The title of the Times article reflects the now almost-universal admission that the ANC regime has become typically African: “In Gupta Brothers’ Rise and Fall, the Tale of a Sullied A.N.C.” The subtitle reads: “An Indian family rose to the heights of power and fortune in South Africa with the help of eager officials in the legendary party of Nelson Mandela.”
In one sweetheart deal, the Guptas not only signed an exclusive and one-sided contract to supply fuel to Eskom from the Optimum coal mine, but even got the power utility partially to finance their purchase of the mine from the Swiss-Israeli-South African magnate, Ivan Glasenberg. Shortly before the deadline for a payment of R2.15 billion, the Guptas were R600 million short. Eskom simply transferred the money to the mine as an “advance payment” for coal still to be delivered, which enabled the Guptas to meet the payment.
John Maseko was a Gupta security guard and chauffeur. He was so impressed by all the important people from the highest echelons of government visiting the Gupta compound to collect bribes or favors that he started recording their movements, including the license plates of their vehicles. Aware that he was privy to glimpses of South Africa’s center of power, Mr. Maseko noted his impressions in a diary. Mr. Hofstatter dedicates an entire chapter to him in Licence to Loot under the title: “What the driver saw.”
However, it was the famous “Gupta wedding” that really made headlines. On May 1, 2013, a Gupta daughter, Vega, married Aakahs Jahajgarhia in a lavish Hindu ceremony for which the Guptas booked the five-star Sun City resort north-east of Pretoria. They flew in 100 guests from India who landed at Waterkloof air force base and never went through passport control, then to be whisked to their luxury accommodations. The wedding is rumored to have cost R30 million (slightly more than $2 million) of money destined for a failed “land reform program” in the Free State. The province paid R500 million ($35 million) to build an all-black, affirmative-action “dairy farm,” but it never got off the ground, with most of the money landing in the Guptas’ Dubai bank account.
South African whites have become inured to the totalitarian extravagance of black rule. They mostly accept being pushed off the highway by the so-called “blue-light brigades” transporting ANC politicians, and have grown accustomed to family members of those politicians becoming instantly rich through miraculous “business deals.” But the Waterkloof air force base episode somehow rekindled atavistic memories of Afrikaner power, when the base housed a few hundred French Mirage planes, able to strike anywhere in the subcontinent. Hence the outcry when a trio of Northern-Indian immigrants and their Hindu guests somehow invaded our once-proud country that had fought the British colonial armies during the Boer War and had helped defeat Erwin Rommel in the North African desert.
If it hadn’t been for the ostentatious wedding, the Guptas might still have been here, amassing more millions leaking from our Africanized state. But eventually the “Big Four” South African banks (Standard, Absa, Nedbank and First National) refused to touch Gupta money, citing “reputational risk.” That made it harder to make transfers to off-shore companies in the zero-tax Gulf states, but the Guptas continued to use the local branch from the home country, the “Bank of Baroda.” The Guptas also maintained a local public company, Oakbay Investments, which housed their holdings in the IT firm Sahara Computers, which supplied government departments and schools.
The Guptas started getting bad publicity, even in our mainstream liberal media that usually hold up whites and “racism” as the root of all evil. At first they paid off some radical black groups such as Black First Land First to lean on journalists, and ran a muck-raking social-media campaign against them.
At the height of this “infowar,” the Guptas hired a well-known London PR firm, Bell Pottinger, to smear all South African whites and cast the Guptas in the role of innocent victims of a racist white elite “clinging to their ill-gotten apartheid gains.” A high-powered lead partner in Bell Pottinger, Victoria Geoghegan, devised a plan whereby the Gupta company Oakbay would be portrayed as a victim of “white monopoly capital.”
Bell Pottinger used a barrage of press releases, social media, and social media bots to stir up hatred against “white monopoly capital” and South African whites in general. The phrase “white monopoly capital” is straight from the lexicon of the South African Communist Party, whose theorists have for decades maintained that real freedom and equality will come to South Africa only after the assets of “white capitalists” have been nationalized and redistributed to the African masses. In fact, this is more or less the official policy of the two most radical black parties now taking part in elections, the EFF (Economic Freedom Fighters) under Julius Malema and BLF (Black First Land First), led by Andile Mngxitama.
Bell Pottinger focused a lot of its attacks on Afrikaner businessman Johann Rupert, the heir to his father Anton’s tobacco and luxury-goods empire. Perhaps the PR firm reasoned that Afrikaners in general attract bad publicity from the international media, so it would not be difficult to smear an Afrikaner billionaire. A key part of the campaign was to draw attention away from the Guptas whose corrupt and outlandish deals were constantly making headlines.
The Gupta scandals were too big to hide, and the smear campaign blew up. This effectively sank Bell Pottinger, but the mastermind, Miss Geoghegan, has apparently found a new job at the PR firm Thoburns. Its founder says that the moment he met her he was “immediately struck by her intelligence and personal integrity.”
The current president of South Africa, Cyril Ramaphosa, was a beneficiary of “BEE [Black Economic Empowerment] deals” that took him from communist trade unionist to millionaire “businessman.” According to the website Businesstech, Ramaphosa is now the 16th richest man in South Africa, with a net worth of R6.4 billion (about $460 million).
Mr. Ramaphosa had barely settled into the presidency when it was revealed that his son Andile had received a payment of R500,000, thought to be a bribe, from Gavin Watson’s notorious Bosasa corporation. A spokesperson for the president told the media that Ramaphosa, Sr. did not need to disclose the financial interests of his son because he was not a dependent child. It sounds a lot like the response from former Eskom CEO Matshela Koko during the “Billion Dollar Babe” scandal, even though Mr. Ramaphosa’s son is suspected of simply being a proxy for himself.
In like manner, Jacob Zuma’s son Duduzane was a “business associate” of the Guptas and also became an “overnight billionaire.” During a meeting in 2009 also attended by Tony Gupta, Jacob Zuma is reputed to have told a senior government bureaucrat: “Duduzane is my only child involved with money. I will appreciate it if you would help him wherever you could.”
When Zuma Jr. crashed his Porsche, killing a passenger in the other vehicle, he phoned Tony Gupta even before alerting the police. If an Afrikaner organization had not threatened to “privately prosecute” him for culpable homicide, he would have got off scot-free; the state declined to charge him with reckless driving.
Having largely plundered the state and state-owned corporations, the ANC is now setting its sights on pension funds. South Africa’s government pension fund, managed by the PIC (Public Investment Commissioner) is already mired in scandals for buying stock in non-listed private companies at inflated prices, effectively fleecing the fund. One such series of scandals involves another Indian, Iqbal Survé, who got the PIC to fund his takeover of a major media group and other businesses.
The China Development Bank is supposed to step in and bail out Eskom because the SA government is running out of money. What China will get for the rescue is still unclear. However, there is talk that as an alternative form of finance, the ANC regime will make a law forcing private pension funds to buy bonds issued by Eskom. These would be known as “prescribed assets,” which all pension funds would have to carry in their portfolios, yet another illegitimate way to prop up an illegitimate system.
At some point, liberalism and African corruption intersect. Liberals are convinced that all people are the same, regardless of race, culture, or ethnicity. Income inequality is a sign of past discrimination, and that is why we must have affirmative action and its South African version, BEE. South Africans swear by BEE, but a system in which white companies hand out free shares to politically-connected blacks creates an elaborate web of legalized corruption. For now, the gravy train will continue as the ANC and its thousands of cronies spend four centuries of savings accumulated by mainly white South Africans.
In any normal country, an avalanche of corruption scandals in the press would bring down the government or—what would be more likely in Africa—lead to a muzzled press. However, South Africa’s newspapers do not have much influence on ANC voters because the papers are read mainly by whites and by educated blacks, many of whom are themselves engaged in corruption or directly benefit from the anti-white system. The most politically influential media are the state radio and television, created by the former white government, that reach tens of millions of blacks in African languages. The SABC (South African Broadcasting Corporation) is so tightly controlled by the ANC and its cronies that it poses no threat; either it does not report scandals or presents them as partisan controversies not to be taken seriously.
Any suspicion that the major Western powers would step in to curtail South Africa’s runaway corruption was effectively dispelled earlier this year when a document was leaked to the Johannesburg Sunday Times. It consisted of a letter by American, British, German, Dutch and Swiss diplomats impressing upon Mr. Ramaphosa that he should do something to curtail corruption if he wanted further foreign investment in the country.
Stung by such “imperialist interference” in the affairs of an “independent African country,” the ANC jettisoned its nominally pro-business mask in favor of its traditional Afro-Marxist rhetoric in a statement: “The ANC condemns this dramatic holier-than-thou stance of these former colonizers and we would not like to relate to them on the history of master-slave relations.”
The five Western powers promptly assured the ANC that it had been “misunderstood,” and that they were not worried about corruption in South Africa. Their embassies issued a “joint statement” essentially saying they had never taken official notice of corruption in South Africa. Its conclusion: “We have strongly supported South Africa’s drive to attract foreign investment from the start and we will continue to do so in the future. We are happy with the positive engagement we have had with the South African government and with civil society partners.”
The German ambassador in South Africa, Martin Schäfer, is a kind of cheerleader for the ANC, and has even celebrated the East German communist contribution to toppling the former white government, as part of a Rosa Luxemburg Foundation event on April 11, 2019.
Complexities and contradictions of History made comprehensible, memories coming alive, with many Zeitzeugen present. pic.twitter.com/qRXRzZm61M
— Martin Schäfer (@AmbSchaefer) April 12, 2019
I suppose Daimler Benz and BMW are making millions selling their most expensive models to South Africa’s looting class, while our national capital disappears down the black hole of ANC corruption. The Germans must be having a good laugh at our expense.
We South African whites stand alone. No Western power, nor Russia, China, or Japan, dares to speak out against the staggering levels of corruption in South Africa and other African countries. But we do. We may have lost our country and most of our assets. However, as Leftists are so fond of saying, we “speak truth to power.”
We are at least making a record of that truth.