PETER ATTARD MONTALTO | Missing variable in SA’s growth equation has known solution

Institutional gaps, not laws, hinder the fight against corruption

The writer says the core interventions required to fix the South African criminal justice system are institutional, and 90% of them sit squarely with government and the judiciary. (Supplied)

A few weeks ago it was argued in this column that the flood of revelations from the Madlanga commission and related processes was reframing the post-state capture narrative negatively, and that the volume and complexity of the criminal justice challenge was running well ahead of the speed of government action (“Corruption revelations weigh on SA’s growth outlook”, April 22).

The implicit question left hanging was: what would actually fixing it look like? There is, in fact, a well-documented answer. The countries that have turned around deeply corrupt, mafia-infiltrated criminal justice systems — Singapore, Hong Kong, Georgia, Colombia’s Medellín, Italy and Estonia — all followed a recognisable template. South Africa has done some of it; the most important parts it has not.

Start with the number no-one seems willing to state plainly. Every successful emerging market criminal justice turnaround in recent decades required sustained on-budget investment of 1%-2% of GDP annually in institutions, salaries, courts, enforcement capacity and social infrastructure. For South Africa that is R82bn-R165bn per year.

Neither the National Treasury nor the criminal justice cluster is remotely contemplating anything at that scale. The budget alignment, as noted in the earlier column, does not match the need. But the political conversation has not yet been forced to confront what matching it would actually cost.

This matters because the investment case is compelling on its own terms. The IMF’s cross-country evidence finds corrupt governments collect about 4%-5% of GDP less in tax revenue than clean peers at equivalent income levels, implying South Africa forgoes R330bn-R410bn in revenue annually. The own stated funding gap of the National Prosecuting Authority (NPA) is R750m-R1bn annually.

A properly constituted, constitutionally entrenched Office of Public Integrity would cost R2bn-R3bn a year at scale. That is less than 1% of what corruption costs in forgone revenue. The National Treasury should present the anticorruption budget as a revenue recovery mechanism, not a law enforcement line item. That it does not appear that way in the medium-term expenditure framework is itself a political signal about whose interests the budget protects.

The core interventions are institutional, and 90% of them sit squarely with the government and the judiciary. South Africa has done the diagnostic work and passed the laws. The Prevention & Combating of Corrupt Activities Act, the Public Procurement Act, the Public Service Amendment Act — on paper, a credible framework. Last-mentioned, in particular, separating political from administrative authority for the first time since 1994, is a genuine structural breakthrough attributable directly to the government of national unity’s coalition dynamics. The gap is not in the law, but in the enforcement architecture and the political will to fund it.

The Hawks sit inside the institution they are meant to police. The NPA’s budget and senior appointments flow through the justice ministry. The National Anti-Corruption Advisory Council recommended an Office of Public Integrity as a constitutionally entrenched Chapter 9 body in September 2025. The president’s 2026 state of the nation address (Sona) reads the government is “finalising the approach”. That is not a timetable; it is a deferral, and investors read it as such.

Equally damaging: two whistleblowers were killed in 2025. The Whistleblower Protection Bill was promised in the 2025 Sona and was absent from Sona 2026. Civil society and investigative journalism are South Africa’s most functional anticorruption assets. Not protecting the people who drive both is not a neutral administrative failure, but a signal that reaches every investment committee that reads a country risk report.

Rebuilt from scratch

Georgia fired its entire traffic police corps in 2004 and rebuilt from scratch with tripled salaries. Hong Kong created its Independent Commission Against Corruption entirely outside the police chain of command, reporting directly to the governor. Rwanda prosecuted military generals. These were not incremental steps. They were institutional ruptures that imposed real political costs on those who ordered them. South Africa is still running task teams of 14 people against a structural problem the Madlanga commission has shown reaches the highest levels of the police command structure.

Business cannot build a prosecution service or replace a corrupted police chain of command. But there is a specific intervention in which private sector advocacy and action can align directly with anticorruption outcomes, and with business’ own interests: eliminating the red tape and manual processes through which corruption most commonly operates.

Every successful case study showed regulatory simplification and digitalisation of procurement and licensing did as much anticorruption work as institutional reform, at a fraction of the cost. Georgia cut its business licences by 85%. Estonia digitised government transactions end-to-end, removing the human discretion in which corruption lives. In both cases deregulation eliminated the contact points where bribes are demanded before enforcement agencies have finished cleaning house. The same dynamic applies at the informal-formal sector boundary: reducing barriers to entry structurally shrinks the space the criminal economy occupies.

South Africa has the same opportunity. Business’s advocacy for product market deregulation, already aligned with Organisation for Economic Co-operation and Development, IMF and World Bank structural reform recommendations, and with Operation Vulindlela’s own agenda, is simultaneously an anticorruption intervention. This is one of the few actions that is tractable; it is in business’s direct interest and does not require waiting for the NPA to find its feet.

There is also a sharper compliance obligation now sitting on business itself. The 2024 amendments to the Prevention & Combating of Corrupt Activities Act created a corporate offence of failing to prevent corruption. This changes the risk calculus for boards and for the banks that lend to them. South Africa’s equivalent of Hong Kong’s Business Ethics Development Centre, systematic, institutionalised, sector-by-sector, does not yet exist in SA to this standard. The private sector needs that conversation with itself, and it needs to have it now.

The following markers will tell us by early 2027 whether any of this is moving:

  • Does the Office of Public Integrity Bill reach parliament with genuine constitutional independence?
  • Does implementation of the Public Service Amendment Act produce merit-based appointments, not suspended-on-full-pay shuffles?
  • Does the Whistleblower Protection Bill pass before year-end?

The structural reforms South Africa has undertaken are real and necessary. But they are a conveyor belt, not a destination. The criminal justice system is the machine the belt runs through. The international evidence is unambiguous: the fix is known, the investment pays for itself, and the sequencing is well-documented. What is missing is not knowledge; it is the political choice to act and the willingness to pay, in fiscal and political capital, what that choice costs.

• Attard Montalto leads on political economy, markets and the just energy transition at Krutham, a South African research-led consulting company.

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