EDITORIAL: Crony capitalism, and the ANC’s business lobby
The tale of Jova Vaccines Supply — a shell company registered on January 29 this year — is a disturbing analogy for the crony capitalism that has begun to take root in SA. Serati Simon Mashilo, a self-proclaimed "good Samaritan", made headlines last week after an anonymous WhatsApp message began circulating claiming that Mashilo’s company had been lined up to score a major tender from the Mpumalanga provincial government, exploiting his alleged links to premier Refilwe Mtsweni-Tsipane.
The premier’s office was swift to deny that such a relationship existed — but Mashilo’s "altruism" was equally promptly unmasked.
The 54-year-old confirmed to the Sowetan that he had, indeed, registered his new company after he heard that the government would pay suppliers to store and distribute Covid-19 vaccines.
"I was only taking a chance because I don’t even have the equipment to do this job. I was hoping that someone would assist me once the tender process starts," said Mashilo.
Clearly, Mashilo — who says he simply saw a business opportunity — has chutzpah in inverse proportion to his skills and equipment.
Yet his notion of what it takes to run a business isn’t that different to the views espoused by the ANC’s Progressive Business Forum (PBF), which was supposedly set up to "manage the dialogue" between business and the governing party.
The cronyism is so unashamed, in fact, that you can even look it up on the PBF’s own website.
Despite the many revelations of how Covid-19 relief funds were looted by those with connections to the ANC, the PBF has no qualms about openly lobbying for its members to get a cut of SA’s vaccine rollout, following a meeting last month with President Cyril Ramaphosa.
Here, proximity to power seems to be the currency of success; whether a company can actually do the job seems a secondary concern.
According to its brochures, the ANC’s PBF offers "subscribers" numerous benefits "including valuable insights and dialogues with ANC leaders".
What you get for its annual membership fee of between R5,500 and R65,000 includes exclusive dinners with ANC leaders; invitations to participate in international trade missions; the chance to provide input to economic workshops; and, best of all, access to ministerial briefings.
The price is a snip, considering it buys you a short cut to the levers of power.
And this can be very lucrative, as shown by the billions in state funds paid to PPE middlemen and "school cleaning companies" who don’t even pretend to have expertise.
Now, businesses have always prized networks — but in most cases, it is simply an introduction, rather than the right to an economic transaction in itself. When networking and lobbying is the sum total of your enterprise, you’re entering a dangerous new realm ripe for misuse. Think Russia after 1989, or SA during the apartheid era.
Admittedly, it’s hard to argue that business is intrinsically virtuous when so many examples of the opposite abound. Steinhoff, Tongaat Hulett and EOH have hardly covered the private sector in glory.
But any company built on the largesse of a receptive minister here, or a donation there, is a toxic distortion of the role that efficient business should play in society. Truly successful companies produce goods and services where the value to customers is clear. Amazon, Netflix and Facebook didn’t exist 30 years ago but today their value proposition is evident.
What is most disturbing about the PBF’s lobbying for vaccine business is that it creates the impression that building a company that can actually do a job isn’t the primary determinant of success.
It is precisely this mangled thinking that convinced Mashilo he deserved a vaccine tender, even though he was hopelessly ill-qualified.
The fact is, SA has very little chance of creating stout companies of global repute if their existence depends on the whim of whichever political party happens to be in power.
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