ARETA condemns the decision of the Minister of Finance to exempt corrupt Eskom from the PFMA
3 April 2023
The African Radical Economic Transformation Alliance (ARETA) condemns in the strongest possible language the despicable, underhanded and corrupt decision by the Finance Minister, Enoch Godongwana, which has granted Eskom an exemption from regulations under the Public Finance Management Act (PFMA) that require state-owned companies to disclose any expenditure that does not comply with the provisions of the act.
According to a notice in the Government Gazette of March 31, Eskom will be exempt from disclosing in its annual reports for three years, starting from the financial year that runs until end-March 2023. Section 55 (2) (b) (i) of the Public Finance Management Act (PFMA) requires that state entities provide particulars in their annual financial statements and annual reports of "any material losses through criminal conduct and any irregular expenditure and fruitless and wasteful expenditure that occurred during the financial year."
ARETA notes that spending in state-owned enterprises (SOE’s) is vulnerable not only to waste and misuse, but also to fraud and corruption. Lack of transparency is inimical to good governance. ARETA believes that sunlight is the best policy for preventing corruption and maintaining high standards of integrity in the use of public funds. Godongwana’s decision comes in the wake of shocking revelations by former Eskom CEO, De Ruyter, of entrenched corruption at Eskom, said to be orchestrated and perpetrated by high-ranking ANC officials. Godongwana’s decision can only be based on cynical decision manipulation of processes to cover-up corruption in state-owned enterprises.
Godongwana’s decision runs counter to the letter and spirit of the PFMA which declares that the object of the PFMA is “to secure transparency, accountability, and sound management of the revenue, expenditure, assets and liabilities of the institutions to which this Act applies.” The PFMA requires that state entities provide particulars in their annual financial statements and annual reports of "any material losses through criminal conduct and any irregular expenditure and fruitless and wasteful expenditure that occurred during the financial year." Lest we forget, Godongwana has a long record of financial improprieties which involved huge losses of workers’ pension moneys – his brazen attempt to hide information about corruption and criminal conduct should not surprise anyone.
ARETA reiterates that our democracy is founded on values of accountability, responsiveness and openness. To give effect to these founding values, the public must have access to information held by the State and all its entities. Indeed, the Constitution demands that transparency must be fostered by providing the public with timely, accessible and accurate information. It is regrettable that Godongwana’s decision follows De Ruyter’s allegations that the ANC was rooted in graft at the embattled power utility and was using the state-owned company as a “feeding trough”. The ANC rejected and denied the allegations, calling for proof. But now the ANC Minister has put a lid on any possible discovery or disclosure of the criminal activities and corruption at Eskom. This will ensure that the ANC will continue to abuse its majority in parliament to prevent any investigation into the matter.
ANC MPs have already rejected calls by opposition parties for an ad hoc committee to be established to investigate De Ruyter’s claims, saying that the respective portfolio committees for Mineral Resources and Energy and Public Enterprises can already do the job. However, the blanket exemption now granted to Eskom is purposely designed to prevent any further investigations and disclosure just like in the Phala Phala matter.
Issued by Carl Niehaus, Chair of the Working Board, ARETA, 3 April 2023
