EDITORIAL: Loosening the PIC purse strings
The manager of state employees’ pensions is under attack and its management seems destined to follow the same path as those of Transnet, Denel, SAA and Eskom
Eight years of the sustained looting of public resources may tempt the common man into thinking the looting brigade would finally be satisfied with its efforts. But he wouldn’t be more wrong. Rather, the appetites of the looters seem to increase at a much faster pace than that at which the public purse empties.
Sure, public sector corruption is as old as the state of SA in all its forms. The corruption of the various governments until 1994 each had its own characteristics. Of course, restrictions on media and civil rights made the corruption seem less prevalent during apartheid than in the open and free society of SA afterwards.
But the freedom of democracy has made it possible for society not only to see corruption happening, but also to comment on and publicly condemn it.
What seems to have drastically changed with the escalation of corruption — particularly in the past eight years — is its institutionalisation by a government that was previously centred on human rights and the rule of law.
These days, to be a politician in charge of a government department seems to be equivalent to getting a blank cheque to loot. In fact, it seems the ladder to greater things is a demonstrably dodgy track record.
Take the minister of finance and his deputy. Everything Malusi Gigaba has overseen since joining the executive has all but collapsed under the weight of unmitigated looting and corruption.
In the financial year ended March 2009, a few months before Gigaba became public enterprises minister, Eskom boasted a cash holding of R18.4bn, up from R10.9bn the previous year. This was enough to run the utility without worrying about working capital and liquidity. Today, with less than R20bn cash, Eskom has less than three months’ operating capital available.
Gigaba’s unceremonious ousting of capable directors such as Mpho Makwana, and their replacement with unemployed and unemployable little-knowns, shocked the market.
The utility then embarked on a free fall over the following five years, with the name Eskom becoming synonymous with corruption.
When Gigaba moved to the department of home affairs in May 2014, Eskom was begging for a cash bailout; it had run out of money to pay suppliers and salaries.
Gigaba’s intervention at the SA Airways (SAA) board similarly stripped the perennially struggling airline of the capable leadership it had in the form of chair Cheryl Carolus and former JSE CEO Russell Loubser, among others. Chair Dudu Myeni has since presided over the nose-diving national carrier.
Now, Gigaba’s only hope to keep SAA, Eskom and other state-owned enterprises running is to raid the only place that has any cash left: the Public Investment Corp (PIC).
So the PIC’s management team has come under attack, and it has embarked on a similar journey to that of management of Transnet, Denel, SAA and Eskom.
Dipping into the PIC coffers — putting millions of its beneficiaries in danger of losing their pensions — is the way Gigaba hopes to rescue these entities from their current mess without raising more debt and risking further credit downgrades.
But the Saxonwold Shebeen crowd will probably be waiting for its last chance at the trough. To that end, PIC boss Daniel Matjila, CFO Matshepo More and key board members will likely be kicked out of the PIC before December.
We’ve been down this road before, with the finance minister taking on the role of key player. A leopard is incapable of changing its spots.