Pandemic corruption spurs open contracting action in South Africa

In May, South Africa’s Special Investigations Unit (SIU) found that then-Health Minister, Zweli Mkhize, had benefited handsomely from an unlawful and irregular contract. The contract to coordinate the Department of Health’s communications had been awarded to Digital Vibes, a company with close connections to Mkhize and his family. According to the SIU, the main competitor for the tender had been irregularly disqualified and Digital Vibes was paid more than double the rival’s bid price. Mkhize, a medical doctor himself, had been the face of the government’s response to the pandemic and as one of President Cyril Ramaphosa’s key political allies had appeared to represent the “new dawn” of clean and effective governance promised by Ramaphosa when he succeeded Jacob Zuma.  

South Africans have built up considerable immunity to stories of government corruption over the last decade, but the news still came as a shock. The Digital Vibes affair comes on the back of a year of procurement scandals in the response to the COVID-19 pandemic, including alleged corruption in the purchase of live-saving protective equipment, that have intensified calls for open and transparent emergency procurement from civil society organizations and the public.

In the wake of the public outcry, there have been renewed commitments from the President and provincial authorities to publish details about COVID-19 procurement. The National Treasury created a dashboard providing information on the contracts awarded and the suppliers. The Gauteng, KwaZulu Natal, Limpopo, Mpumalanga, Western Cape provinces also began publishing COVID-related procurement reporting reports. A new eTenders portal has been implemented by the Office of the Chief Procurement Officer too. 

While these resources currently lack some of the details needed to monitor critical corruption red flags effectively, they have provided a starting point for discussions between civil society and the government on how to make contracting information more user-friendly, re-usable and machine-readable. 

A key actor in these conversations has been the Procurement Reform Working Group, which was formed during the pandemic by several civil society organizations that have been working to tackle corruption and improve governance in South Africa. With support from the Open Contracting Partnership, the group offers a forum for a variety of procurement actors from civil society, organized labor, business and government to identify opportunities for procurement reforms and to collaborate in implementing them. Its current members are Corruption Watch, the Public Affairs Research Institute (PARI), the Public Service Accountability Monitor (PSAM), OpenUP, the Ahmed Kathrada Foundation, a trade union representative and other independent researchers. The Procurement Reform Working Group is now working with OCP to review the government’s COVID-19 procurement publications and make constructive suggestions for their improvement. 

Members of the Procurement Reform Working Group have also demonstrated the value of publishing contracting data by developing their own tools, using the publicly available government publications as a source. During the pandemic, PSAM and Open Up created a new civil society emergency procurement monitoring tool keepthereceipts.org.za. The fully open source platform assists media and members of the public to search through the COVID-19 procurement material, relying on the tech community to convert the documents published by treasuries into machine-readable and searchable documents.

The lack of detailed information on suppliers provided by some provincial governments has proved a major challenge, says OpenUp’s JD Bothma. But even with the scant information available, Keep The Receipts can be used to track and identify contracts, which in turn informs further investigations into the companies involved in the process. The tool is a practical demonstration of why citizens, the media and government entities should advocate for the improvement of the quality and quantity of data published by the National Treasury, Bothma adds.

Keep The Receipts complements existing collaborative tools for monitoring public finances, such as the open budget data portal, Vulekamali, which was created by the Imali Yethu civil society coalition alongside the National Treasury. This collaboration between civil society and National Treasury was a “major learning curve,” said PSAM’s Zukiswa Kota, civil society point of contact for Vulekamali, describing it as an “exciting and challenging endeavor.” Bringing together state and non-state actors to discuss how to increase access to the data in more meaningful ways has highlighted the technical constraints governments face as well as the need to clearly identify why increased transparency is so important for South Africa’s democratic spaces.

Despite the millions of rand lost and the nation’s justifiable anger at the theft of public money during a national crisis, the Digital Vibes procurement scandal and the focus on emergency procurement demonstrated three direct developments that provide hope for South Africa and its accountability mechanisms for procurement-related corruption.

First, the SIU’s investigation and report on the irregular procurement process demonstrates that the agency has the capacity and willingness to hold high-profile officials accountable. The involvement of agencies like the SIU and the Auditor General of South Africa is crucial in ensuring accountability. Civil society organizations have been able to support the work of these agencies by conveying whistleblower reports and sharing other information on suspected irregular procurement. This could be a great recipe for repairing much-needed public trust in the process.

Second, the media has been vocal and instrumental in uncovering the extent of the corruption facilitated through Covid-related procurement and in maintaining public awareness, such as the thorough investigative reporting from Scorpio exposing the extent of the corruption and procurement irregularities of the Digital Vibes contract. 

Third, and perhaps most significantly, Health Minister Mkhize resigned. In a country where there has been very little accountability for government corruption in the past, the resignation of a high-ranking minister after allegations of procurement-related corruption does, perhaps, mark the “new dawn” President Ramaphosa spoke about.

A new culture of accountability may be growing in South Africa, and the Procurement Reform Working Group is seeking to build on that momentum. State-owned entities – for so long the heart of corruption in the country – are developing new systems of procurement monitoring and accountability. Through research conducted with the Infrastructure Transparency Initiative, the Human Sciences Research Council (HSRC) identified innovative measures adopted by various state-owned entities to improve their internal monitoring of procurement processes. Examples of this include cross-checking of bid committees’ work and the involvement of external experts. The Procurement Reform Working Group will work with the HSRC to research these initiatives and set out possible best practices for other state-owned entities. 

Although there have been these successes to celebrate, the scale of the corruption and wastage in South Africa’s procurement system requires much more action. The country can no longer rely on its investigative journalists to uncover corruption: we need the data to be published promptly and effectively by treasuries so that irregularities can be identified at the source or by simple monitoring by the SIU, the auditor general, and civil society. With the formation of the Procurement Reform Working Group, civil society can harness the momentum that has been built for more accountability and collaborate with the National Treasury to improve the quantity and quality of procurement data that is being published. Perhaps, then, rather than sharing stories about corruption, we can talk about best practices and successful policies to social problems.

Cover photo by Corruption Watch