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The president has vowed to crack down on corruption and theft relating to Covid-19 relief funds.

Ramaphosa vows 'very, very severe' consequences for theft of Covid-19 relief funds

President Cyril Ramaphosa on Thursday vowed to crack down on corruption or mismanagement relating to Covid-19 relief funds, saying the consequences would be “very, very severe” for those found guilty.

In an address to the nation in the evening, the president said the government had established a “coordinating centre” to strengthen efforts between law enforcement agencies and investigate allegations of corruption relating to social relief grants, procurement of personal protective equipment, and distribution of food parcels. 

A total of 36 cases are already at an advanced stage of investigation, the president said, without going into specifics.

The coordinating hub, which is based at the Financial Intelligence Centre, brings together nine state institutions including the FIC, the Independent Police Investigative Directorate, the National Prosecuting Authority, the Hawks, the South African Revenue Service, the State Security Agency and the Special Investigations Unit.

Ramaphosa said he also on Thursday signed a proclamation authorising the Special Investigations Unit to immediately investigate any suspected unlawful activity in the procurement of goods during the state of disaster, involving any state institution or any potential misuse of Covid-19 funds across all spheres of the state.

“If it finds evidence it is obliged to refer such evidence to the prosecuting authorities,” Ramaphosa said. “It is also empowered to institute civil proceedings for recovery of any damages.

The president also promised to “ensure speedy action” by insisting on interim reports on investigations every six weeks.

‘No scope for corruption’

“From the outset of our response to the pandemic, we have been quite clear that there must be no scope for corruption… More so than at any other time, corruption puts lives at risk,” the president said.

Ramaphosa was speaking amid concerns over state payments and grants for Covid-19 relief being squandered. On Tuesday, KwaZulu-Natal Premier Sihle Zikalala stated at a media briefing that nearly R30 million had been uncovered in irregular expenditure for personal protective equipment and blankets by the province’s social development department.

In addition to measures against corruption, Ramaphosa noted that National Treasury had established regulations to ensure that emergency procurement would meet standards for competitiveness and cost-effectiveness, with regulations established to prevent price gouging during the state of disaster.

The Competition Commission has, during the state of disaster, investigated over 800 companies on excessive pricing and either prosecuted or reached settlements with 28 companies. These settlements or penalties amount to over R16 million.

The Auditor-General has also established key measures to safeguard Covid-19 relief funds, Ramaphosa said, with special audits to detect and prevent misuse and to identify any risks in the system.

But, said Ramaphosa, corruption and fraud remained a concern.

“What concerns me, and what concerns all South Africans, is those instances where funds are stolen and misused – where goods we have to procure are diverted, or food parcels are stolen from needy households,” he said. He also pointed to collusion between officials and service providers, as well as the creation, in some instances, of fake non-profit organisations in a bid to access relief funding.

“We are determined that ever instance of alleged corruption must be thoroughly investigated,” said the president. “Those that are responsible for wrongdoing must be prosecuted in order to speed up and strengthen the process of dealing with corruption.”

The president stressed that during the pandemic, no resources could be lost to corruption or mismanagement.

“The fight against Covid-19 is stretching our capability and resources to the limit. We are therefore determined that there should be no theft and no wastage of public funds,” he said, adding that for those found guilty, “the consequences… will be very, very severe”.

“We will take steps to recover all funds … and it does not matter who has done so.”

Regarding a longer-term economic recovery programme, the president said there had been “a great deal of alignment across various plans and proposals” submitted thus far.

“We are building a consensus on the practical measures that we will need to take now and in the coming months. We will be addressing this matter in the weeks to come,” he said.

Earlier this month, two economic plans were released: the ANC’s paper titled Reconstruction, Growth and Transformation: Building a New, Inclusive Economy; and the B4SA document titled Post Covid-19: A New Inclusive Economic Future for South Africa – Delivering an Accelerated Economic Recovery Strategy.

South Africa, which earlier in the year announced an unprecedented R500 billion in Covid-19 relief, has received approvals from the African Development Bank and the New Development Bank for financial assistance, and discussions are ongoing with the International Monetary Fund.