SA's R50bn 'Arms Deal Scandal'

By Nevin, Tom | African Business, June 2001 | Go to article overview

SA's R50bn 'Arms Deal Scandal'


Nevin, Tom, African Business


This-month, June sees the beginning of a public hearing into charges of corruption and graft involved in south Africa's biggest arms procurement deal - a R50bn package signed two years ago. But a huge debate is raging over whether or not the investigations will have any teeth. Whatever the outcome of the hearings, the arms scandal investigations are seen as a litmustestor the ANC government's commitment to accountability.

The South African government calls it "a fishing expedition". The political opposition and other concerned bodies are convinced there is widespread corruption and graft in the awarding of contracts in South Africa's R50bn military hardware shopping spree. One politician says she has irrefutable proof of wrongdoing in high places.

Whatever the situation, public hearings into the deal begin this month, June. The 'arms scandal' is shaking institutional South Africa to its roots. The furore is because there is widespread belief that the ANC-led government has succeeded in pulling the teeth of the probe and has corralled the issue into an Investigation conducted almost exclusively by the ANC.

Just as the procurement of South Africa's $5Obn arms basket is the biggest in the country's history, so too is the controversy over the way alleged graft, corruption and backhanders in the deal will be investigated. The main challenge will be to ensure its thoroughness.

In the two years since the deal was put together, questions have bubbled to the surface, not the least being public alarm at the rapidly spiralling cost of the military hardware. Doubts were also voiced, that the counter-trade and job creation elements which had been built into the package would come anywhere near the promises that were trumpeted when the deal was announced.

Questions investigators want answered include: How does a R29.5bn agreement so rapidly expand to R5Obn? In two year's time it will be R6Obn. What limits were set on escalations? What happened to the supposed benefits of counter-trade and employment creation used to garner public support for the purchases?

Since the latter half of last year, persistent claims of impropriety in the awarding of arms contracts have been levelled. So another purpose of the inquiry is to lay those suspicions at rest. If the investigation is seen to be half-baked, or if government is seen to be undermining its effectiveness, the legitimacy of the probe will be called into question.

There is no evidence of attempts to protect the top echelon in either the public or private sector. "But," one commentator points out, "it will be very harmful to South Africa if this impression is conveyed to the foreign investor community."

For all its political convolutions, the brouhaha over the arms procurements probe is becoming like sitting the exam and learning the subject later. Those pushing for an Investigation are withholding what evidence they claim is in their possession and, with a few small exceptions, little concrete proof has been forthcoming that anything of earth-shattering consequence is amiss - in either the negotiations or the procurement so far of arms and associated products and services.

However, the protagonists insist, if there is foul play then they want the agency with the most teeth to tackle it. The government, on the other hand, is happy for the investigation to proceed, but wants it handled by agencies in its control. It has repeatedly branded calls for an investigation as a 'fishing expedition'.

That's the nub of the matter, as it now transpires. Opposition parties and some quango agencies say the ANC is confusing the party with the state, and that they should stop meddling, stand back and let an independent investigation take its course.

Warning signs

How did a deal that was signed two years ago for R29.9bn become R50m today? A Department of Finance briefing to the cabinet in August, 1999, holds a few clues - and warnings - that the governing elite apparently chose to ignore. …

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