I was settling into my hotel room no more than 2km from Gateway Mall in Umhlanga, getting ready to watch the president’s opening of parliament address (knowing what I definitely didn’t want to hear), when news broke of the attempt to assassinate advocate Coreth Naudé outside the popular eThekwini shopping centre.
Naudé had just left a tax inquiry looking into the affairs of controversial business-person Shauwn Mkhize and her company, Royal AM Football Club, and other entities, held at the offices of Cox Yeats Attorneys in Umhlanga.
The attempted assassination came 488 days after the double murder of Cloete Murray and his son Thomas. Murray Snr and Naudé worked together for years on the tax inquiry and preservation of Mkhize’s business empire, with Murray Snr acting as court-appointed curator.
Along with the high-profile assassinations of Babita Deokaran, the whistle-blower into widespread corruption inside the Gauteng health department, and Johannesburg corruption investigator Zenzele Sithole, the attempted hit on Naudé has been condemned by legal minds, civil society, the SA Revenue Service and the police minister as a direct attack on the rule of law in the country.
I was in Umhlanga to facilitate a conference with pension fund trustees and principal officers, and among the agenda items was infrastructure investment. While there is a clear understanding of the economic imperative to invest in the roads and railways, power stations and ports, schools and hospitals that could and should be powering our growth — and some appetite to do so — there is understandable hesitance given the degree to which the construction sector in particular has been infiltrated by organised crime.
The Global Initiative Against Transnational Organised Crime, through its SA Observatory, recorded at least 10 politically related assassinations from January to April 2024, compared with 31 in the whole of 2023. These assassinations have targeted individuals in political or administrative roles, whistle-blowers and activists, severely affecting governance and democracy by silencing opposition and influencing political outcomes.
Over the past decade targeted killings in SA have increased by 108%. Political killings, especially at the municipal level, have escalated sharply. Hitmen have become bolder, and incidents more public and high profile. With only about 15% of murders in SA solved due to an overburdened criminal justice system, we’ve whiffled over the crisis for far too long now.
In 2023, GI-Toc documented 131 targeted killings, categorised into those related to organised crime (35%) and the minibus taxi industry (34%), political assassinations (24%) and personal assassinations (7%). The figure likely undercounts the true number due to the reliance on public information sources.
Mkhize has been linked to the infamous construction mafia and likened to cartel boss Griselda Blanco, who became a prominent figure in the cocaine drug trade between Medellín, New York and Miami during the 1970s throughout the early 2000s. She was known as “the Black Widow”.
The construction mafia initially infiltrated disaffected local communities that were promised economic opportunity for decades without follow-through, using their legitimate concerns to get a foot in the door. This is where policymakers need to tread very carefully.
The law mandates that a percentage of state projects must be allocated to local communities, requiring navigation through complex legislation. Economic empowerment policies influence this process. While the construction mafia’s roots predate the 2017 National Treasury amendments, which required 30% of contract costs in government deals over R30m to benefit local groups, including those in rural or underdeveloped areas, it marks a major escalation point.
This led to legal challenges, with the Constitutional Court overturning the regulations in February 2022 as only state organs, not the minister, are allowed by law to set procurement policy.
The Public Procurement Bill, introduced to parliament last July, aims to resolve these issues and incorporate the Zondo state capture commission’s recommendations to combat corruption and establish oversight bodies. However, the 2017 regulations, associated with the Zuma faction’s patronage network, have been misused by construction mafias to demand a 30% share of private projects too.
The 2022 revisions of the Preferential Procurement Policy Framework Act allow state entities to set their empowerment preferences, often leading to legal disputes over fairness. The notion of a 30% share has become entrenched, creating dangerous precedents and difficulties for private companies, which face threats and extortion.
The new trade, industry & competition minister would like the state to get its hands on more of the R5-trillion that is sitting in SA retirement funds, to help solve the country’s infrastructure funding equation by making further tweaks to regulation 28. It’s a terrible misdiagnosis of the problem.
These funds are nowhere near their current prudential capital allocation limits under regulation 28 anyway. How can you as a trustee of a fund invest your members’ funds, for which you are fiduciarily responsible, into projects that run the risk of being captured by organised criminal networks?
President Cyril Ramaphosa managed to sterilise his speech when he announced, as expected, yet another “national dialogue”. The proposal is Ramaphosa’s call for collective introspection. But the only introspection that needs to take place is in the minds of the ANC economic policy wonks who cling fatally to the chimera of inclusive growth and transformation as a centrepiece of their economic plans. The economy will transform if it grows, but to insist that transformation drives that growth is to put the policy cart before the economic horse.
We don’t require a national dialogue to get SA growing again. We need this government to defend the rule of law, sort out the ambiguity in state procurement policy and redouble its efforts to prosecute the Mkhizes of this world with all the power at the state’s disposal.
• Avery, a financial journalist and broadcaster, produces BDTV’s ‘Business Watch’. Contact him at badger@businesslive.co.za.
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