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Corruption in South Africa: Causes and Effects
In the past years, South Africa has registered several cases where public resources have been used for private gains and increasing favoritism that makes the majority of qualified and experienced citizens unable to secure job opportunities. Based on the report findings of the Zondo Commission and Crimewatch, the issue is common in the government sector whereby the people in charge of various departments intentionally misappropriate the nations wealth by securing tenders and delivering substandard services to the community. The growing aspect of corruption in the country is making potential foreign and local investors restrain from venturing into the economy. The prevalence of corruption in the country as a result of state capture has made major corporations to perform poorly and foreign investors to withdraw their investments from the economy impacting the economic growth.
After attaining independence, South Africa has been managed and ruled by the African National Congress (ANC). However, instead of the government officials facilitating the growth of the country, the majority have taken advantage of their power to loot the countrys resources (Moult, 2019). The aspect of state capture whereby the president allocates close friends to run major corporations has fueled the level of corruption in the country ( Crime watch archives out and about, 2022). The politically allied individuals select their relatives and close friends to head the organizations in order to create a leeway for accessing resources meant for their operations (Rapanyane, 2021). For instance, the South African Revenue Services (Sars) that was once a well-performing tax institution became under the state capture after its ability to investigate and enforce were limited after its leadership was significantly weakened.
The top-level corruption in the country has affected the economic growth and development. Generally, the performance of an economy is significantly influenced by the inflow of foreign direct investment (FDI) into the local market. When investors establish business organizations in the country, they create a pool of employment which is useful in lowering the unemployment rate (Chamisa, 2020). However, in the case of South Africa, the authorities have made it challenging for potential investors who are able and willing to start companies in the nation. Some of the firms are forced to bribe to access the markets in order to operate in region (Luu et al., 2018). The practice is, therefore, hindering significant investments that are supposed to generate and increase the nations growth domestic product.
Similarly, the increasing rate of public and private involvement in corrupt acts is making South Africa among the states with high corruption index. When a country is ranked higher in the global bribery category, it losses its ability to attract investors to venture into the various domestic market (Kasasbeh, Mdanat, and Khasawneh, 2018). The rating, therefore, has the potential of influencing the decision of people and companies willing to undertake projects in the country. Such outcomes are detrimental to the well-being and growth of the economy.
The increasing level of corruption in public, private, and all other sectors in the country is risking the global bribery rating of the country. Potential investors will be scared of venturing into the local markets due to unethical conduct. The Zondo Commission reports identified state capture and failure of the national government as the key contributors to the growth rate of fraudulence in the nation. Therefore, without proper measures by the current government, the country will have low FDI thus leading to high unemployment.
References List
Chamisa, M.G. (2020) Does corruption affect Foreign Direct Investment (FDI) inflows in SADC countries? Journal of Applied Accounting and Taxation, 5(2), pp.166-174.
Kasasbeh, H.A., Mdanat, M.F. and Khasawneh, R. (2018) Corruption and FDI inflows: Evidence from a small developing economy, Asian Economic and Financial Review, 8(8), pp.1075-1085. Web.
Luu, H.N., Nguyen, N.M., Ho, H.H. and Nam, V.H. (2018) The effect of corruption on FDI and its modes of entry, Journal of Financial Economic Policy. Web.
Moult, K. (2019) Promises and lies? Elections, commissions of inquiry and the state of criminal justice in 2019, SA Crime Quarterly, (67), pp.3-5. Web.
Out and About. (2022) Crime watch archives out and about, [online] Web.
Rapanyane, M.B. (2021) Seizure of State organs, corruption and unaccountability promotion in South Africa: Case study of Jacob Zuma administration. African Journal of Development Studies, 11(3), pp.251-270.
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