DA welcomes National Lotteries Commission COO voluntary leave following DA pressure

The Democratic Alliance (DA) has reliably learnt that the Chief Operating Officer of the National Lotteries Commission (NLC), Philemon Letwaba has taken voluntary leave with immediate effect until 1 March 2020.

This comes after the NLC has finally relented from pressure from the DA and the public that an independent forensic audit must be conducted into the crisis hit commission over dodgy payments to friends and family, including the wife of the COO.

To date, Trade & Industry Minister, Ebrahim Patel has remained steadfast in his silence while allegation after allegation of corruption has been unearthed by GroundUp and journalist Raymond Joseph. This includes the threats of lawsuits and criminal charges against journalists by the NLC for uncovering their underhandedness.

The voluntary leave of the COO is a step in the right direction but it is merely a cosmetic one unless the Minister is prepared to get his hands dirty and tackle the rouge Board at the NLC.

That is why on the 23rd of January 2020, I wrote to the Minister to ask him to fire the Board and place the NLC under administration due to their failure to act against the COO and get to the bottom of the rot. Unfortunately, the Minister has continued to ignore my request, let alone respond to my letter. The big question is, what is the Minister so afraid of when it comes to fighting alleged corruption in the NLC?

The DA again reiterates it’s call for Minister Patel to stop hiding in the shadows and show some leadership by firing the Board and placing the NLC under administration.

DA walks out of Competition Amendment Bill deliberations

This morning, my colleague and I on the Portfolio Committee on Economic Development walked out of deliberations on the controversial Competition Amendment Bill.

This followed an egregious display of Stalinist chairing by the committee chair, Ms. Elsie Mmathulare Coleman, who tried to prevent us from posing questions to Economic Development Minister, Ebrahim Patel.

The draft Competition Amendment Bill, which was tabled in Parliament on 11 July, is being railroaded through the committee without proper interrogation. Only two days were set aside – during the parliamentary recess, moreover, to work clause-by-clause through a technically complex piece of legislation that could have far-reaching consequences. Unfortunately, several members of the committee could not be present on that occasion.

When the opportunity arose today to engage the Minister on the substance of the bill, Ms. Coleman intervened to close down discussion.

Her conduct was shortsighted and authoritarian and unbecoming of her status as the committee chairperson.

If it is enacted in its current form, the Competition Amendment Bill could increase the cost of doing business, deter foreign investors and kill jobs. With almost 10 million people unemployed in South Africa, Parliament needs to process the legislation carefully and thoughtfully, not rubber-stamp it with unseemly haste so that the ANC can crow before its constituency about ‘making the economy more inclusive’ ahead of the 2019 election.

It is unfortunate that Ms. Coleman seems to be more concerned with her re-election prospects than doing justice to a key piece of legislation which could compromise the ability of business and our country to create much-needed employment.

Competition Commission must account for R129 million in irregular expenditure

The Competition Commission must account for R129 million worth of irregular expenditure, amidst unanswered questions relating to maladministration and corruption at the regulator.

In the Competition Commission’s Annual Report for 2017/18, the Auditor-General found total irregular expenditure of R128 590 000 over the two previous financial years, including amounts of:

  • R745 000, the details of which were not provided, that resulted in a forensic investigation and a fraud case being opened; and
  • R40m in 2017 and R86m in 2018 related to contravention of the regulations for supply chain management, for costs incurred on forensic, economic and legal experts utilised on cases.

These findings come hot on the heels of my letter to Economic Development Minister Ebrahim Patel in July, in which I asked him to establish a commission of inquiry to investigate:

  •  The Commission’s favouring of certain legal firms in cartel cases. This includes the precise nature of the professional and financial relationship between the Commission and Ndzabandzaba Attorneys. The firm’s principal partner, Antony Ndzabandzaba, previously served as head of training and development in the Commission’s cartels division. His law firm has benefited handsomely from the Commission’s coffers in the last eighteen months, raking in over R10 million for work on cartel cases alone (63% of all such expenditure by the Commission);
  • Potential conflicts of interest among members of the Commission’s Executive Committee; and
  • The purported use of VIP security protection for members of the EXCO, including the Commissioner, the Deputy Commissioner, the Divisional Manager of Cartels and the Chief Financial Officer; and

To date, I have still not had a formal written response to my request.

It is clear that a murky cloud hangs over the Competition Commission’s financial and administrative probity, with flagrant violations of regulations for supply chain management, and Minister Patel need to establish a commission to investigate these serious matters forthwith.

President Cyril Ramaphosa is a man without a plan to fix the economy in SA

The following speech was delivered today in Parliament by the DA Shadow Minister of Finance, David Maynier MP, during a debate on Infrastructure Development.

1. Introduction

During his first State of the National Address on 16 February 2018 President Cyril Ramaphosa spoke of renewal, of revitalization and of progress, and announced a “new path” of economic growth, of employment and of transformation in South Africa.

However, we must now face the fact that, within just six months, the “new path” of economic growth, of employment, and of transformation, is dead in South Africa.

We are now in deep economic trouble, with the economy in recession, and with 9.6 million people who do not have jobs, or who have given up looking for jobs, and who live without dignity, without independence, and without freedom in South Africa.

2. Recession

We heard this week that the economy contracted by 0.7% in the second quarter, following a contraction of 2.6% in the first quarter of this year, which means that the economy has now slipped into recession in South Africa.

We heard:

  • that fixed investment had decreased by 0.5%; and
  • that household consumption expenditure had decreased by 1.3% in the second quarter of 2018.

Well, that should come as no surprise, because:

  • despite all the talk about “infrastructure-led growth”, spending on infrastructure, which contributes to economic growth and job creation, has actually been cut by a staggering R46.6 billion in 2017/18, R48.3 billion in 2018/19 and R43.8 billion in 2019/20; and
  • that ordinary people are now experiencing an “income squeeze”, largely as a result of an increase in value added tax, which translates, for example, into an average annual cost to the poorest households of R105 per year in South Africa.

In the end, what all this means is that ordinary people who are battling to make ends meet, and who are battling to put bread on the table, are now worse off in South Africa.

3. Response

What we expected was a recession-fighting plan, but what we got:

  • from President Cyril Ramaphosa was: silence;
  • from the Minister of Finance, Nhlanhla Nene, was: surprise;
  • from the Minister of Economic Development, Ebrahim Patel, was: blame the drought; and
  • from the ANC’s economic policy “tsar”, Enoch Godongwana, was: blame former President Jacob Zuma.

[In fact, the finance minister was caught off-guard in – you guessed it, in China – mumbling that the recession was, “entirely surprising because we did not think we will have second contraction [and] we were hoping for a moderate recovery”.]

The fact is that despite all the talk about a “new path”, about economic growth, about employment, and about transformation, President Cyril Ramaphosa, is as man without a plan, when it comes to fixing the economy in South Africa.

His approach to fixing the economy is a toxic mix of:

  • a much spoken about, but little seen, “stimulus package”, designed to ignite economic growth and create jobs;
  • a series of much spoken about, but little seen summits and conferences, including a “Jobs Summit”, and an “Investment Conference”; and
  • a series of reckless economic policy proposals, including the formation of state banks, land expropriation without compensation, and the nationalization of the reserve bank in South Africa.

Which, in the end, are actually not designed to fix the economy, but are designed to:

  • to maintain unity within an increasingly divided ANC/SACP/Cosatu alliance; and
  • co-opt radical opposition parties, who support reckless economic policy proposals, including the formation of state banks, land expropriation without compensation, and the nationalization of the reserve bank, ahead of Election 2019.

We are in deep economic trouble because President Cyril Ramaphosa is more committed to fixing the politics, and consolidating his own political power, ahead of the general election, than he is to fixing the economics in South Africa.

We have to face the fact that the biggest “roadblock” to fixing the economy is President Cyril Ramaphosa who is too scared to decide, because he is too scared to divide, the increasingly fractured ANC/SACP/Cosatu alliance in South Africa.

We should never forget that he was effectively “hired” by the most dangerous man in politics, Deputy President David Mabuza, and can be “fired” by Deputy President David Mabuza, who actually has power within the governing party, in South Africa.

Whatever the case, in the end, it is the politics that is killing the economics in South Africa.

4. Conclusion

We must give hope to the 9.6 million people who do not have jobs, or have given up looking for jobs, in South Africa.

However, to give hope to the 9.6 million people who do not have jobs, or who have given up looking for jobs, we need a fundamental change in economic policy in South Africa.

We need to:

  • implement a package of structural reforms designed to boost private sector investment and increase economic growth to an average of at least 3%.

We need to:

  • introduce a package of cost-cutting measures, aimed at reducing current spending, which are designed to stabilize national debt below 50% of GDP.

We need to:

  • fight for the independence of the reserve bank, rather than fight for the nationalization of the reserve bank.

We need to:

  • boost competition by privatizing, or part privatizing, zombie state-owned enterprises, starting with South African Airways.

And, we need to:

  • mitigate long-term fiscal risks by, for example, scrapping national health insurance in South Africa.

We need, most urgently of all, to scrap reckless economic policy proposals, including the formation of state banks, land expropriation without compensation, and the nationalization of the reserve bank in South Africa.

Minister must appoint independent inquiry to investigate claims about Competition Commission

The DA has today written to the Minister of Economic Development, Ebrahim Patel, asking him to appoint an independent inquiry into the Competition Commission.

This follows issues raised with the DA by concerned parties as well as a disturbing report on the Commission in today’s edition of the Financial Mail.

We cannot allow any form of corruption or mismanagement to taint or damage its reputation in this key role.

The allegations are of sufficient magnitude to warrant further investigation. This is in the interests of the Commission’s institutional integrity and stability.

The inquiry should be required to investigate:

  • A pattern of behaviour that undermines the Commission’s integrity, substantiated by recent court judgments. These include the ruling in June by KwaZulu-Natal Deputy Judge President Isaac Madondo that the Commission had relied on conjecture, speculation and hearsay to obtain search-and-seizure warrants for ‘dawn raids’.  The judge said the Commission was guilty of a “serious breach of its duty of good faith” because it withheld information and failed to disclose material facts to the court.
  • The precise nature of the professional and financial relationship between the Commission and Ndzabandzaba Attorneys. The firm’s principal partner, Antony Ndzabandzaba, previously served as head of training and development in the Commission’s cartels division. His law firm has benefited handsomely from the Commission’s coffers in the last eighteen months, raking in over R10 million for work on cartel cases alone (63% of all such expenditure by the Commission).
  • Potential conflicts of interest among members of the Commission’s Executive Committee.
  • The purported use of VIP security protection for members of the EXCO, including the Commissioner, the Deputy Commissioner, the Divisional Manager of Cartels and the Chief Financial Officer; and
  • The procedural correctness of all recruitment – and appointment processes for management positions filled since 2015.

It is vital that the Minister resolves any concerns about the Commission’s integrity. He should do this by appointing an independent inquiry as soon as possible.

Given that 9.4 million South Africans are unemployed, a well-functioning Competition Commission is vital to help unlock jobs by allowing space for small and medium businesses to thrive in the economy.