Billions looted in corrupt COVID-19 feeding frenzy – Report

South Africa’s Special Investigating Unit (SIU) is investigating 90 companies which are alleged to have benefitted from corrupt health department contracts, according to a report by the Sunday Times.

The SIU added that its team had been at the Gauteng Treasury for at least a week.

“They have already established that there are 90 companies they are investigating… just for the health department in relation to PPEs only,” the SIU said.

“If one of them is to the value of R125 million and there are 90 of them, it is a lot of money.”

These deals are reportedly worth more than R2.2 billion and relate to the purchase of personal protective equipment to help curb the spread of the coronavirus in the province.

Black Business Council president Sandile Zungu told the publication that he was disheartened to see these corrupt business people benefit from his lobbying.

“We now have to put it on record that these are not black businesses, but thieves,” Zungu said.

He called the beneficiaries of these corrupt contracts “parasitic COVIDpreneurs” who rob authentic and ethical black businesses of the opportunity to do legal business with the government.

“South Africa is becoming a nation of thieves, with the most unscrupulous enablers in official positions all too ready to feast on the relief meant for the most vulnerable in our society.”

Ramaphosa addresses corruption

This follows after President Cyril Ramaphosa announced last week that special measures would be implemented to fight corruption during the COVID-19 pandemic.

Addressing the nation on Thursday 23 July, Ramaphosa said he was concerned about COVID-19 funds being stolen or misused, and food parcels being diverted from needy households.

He said increasingly South Africans were hearing allegations about:

  • Fraudulent UIF claims
  • Overpricing of goods and services
  • Violation of emergency procurement regulations
  • Collusion between officials and service providers
  • Abuse of food parcel distribution
  • The creation of fake non-profit organisations to access relief funding.

“More so than at any other time, corruption puts lives at risk,” the president said.

Government has been clear there is no scope for corruption in its response to the pandemic, Ramaphosa said, and it has taken various steps to fight this corruption.

These include the conducting of special audits to detect and prevent misuse of funds, the establishment of a centre to strengthen the efforts of law enforcement in combating corruption, and the investigation into unlawful or improper contracts by the SIU.

The SIU is empowered to institute civil proceedings for the recovery of any damages or losses incurred by the state, Ramaphosa said.

Ramaphosa said he will receive interim reports on investigations every six weeks, adding that he is determined there should be no theft of public funds.

“The consequences for those who break the law or bypass regulations will be severe,” Ramaphosa said.

R5-billion loan approved

These reports of widespread corruption follow the recent approval of a R5-billion loan from the African Development Bank to help fight COVID-19 in South Africa.

The loan approved is the second from a multilateral lender after the country received a $1-billion emergency facility from the New Development Bank last month to help offset the damage caused by the virus and finance the government’s R500-billion stimulus package.

These funds will purportedly be used to help businesses in the country’s formal and informal economies, preserve jobs, and promote access to essential services and personal protective equipment.

The number of COVID-19 cases continues to rise in South Africa, and Health Minister Dr Zweli Mkhize has announced there are now a total of 434,200 cases of coronavirus in the country.

This is an increase of 12,204 cases from the 421,996 infections reported on Friday.

There are 312 new COVID-19 related deaths, bringing the total to 6,655 casualties, with a 24-hour high of 572 deaths reported on Wednesday evening.

Dr Mkhize pointed to 263,054 recoveries to date. A total of 2.73 million tests have been conducted, with 46,324 tests conducted over the past 24 hours.

Now read: Corruption crackdown in South Africa

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Billions looted in corrupt COVID-19 feeding frenzy – Report