South Africa's $30bn COVID-19 relief package exposed to fraud

JOHANNESBURG: South Africa's auditor general said on Wednesday that some of the money in its 500 billion rand ($30 billion) COVID-19 relief package may have been fraudulently paid to improper beneficiaries.

Reports of suspect deals between government officials and businesses providing medical equipment or food aid parcels to the poor, as well as mismanagement of the disaster fund, have sparked public outrage.

In August, the Special Investigating Unit (SIU) told lawmakers it was combing government departments for possible corruption over irregularities in coronavirus-related tenders worth 5 billion rand.

In a televised briefing, Auditor-General Kimi Makwetu said an analysis of around 145 billion rand of expenditure meant for relief programs like unemployment and poverty grants "identified indicators of a higher risk of fraud and abuse of funds.

"Audit work to date found an increased risk of payments to ineligible beneficiaries, overpayments, underpayments, the invalid rejection of beneficiaries, fraud and double-dipping," Makwetu said, referring to welfare and unemployment grants.

Makwetu's report said payments to 30,000 beneficiaries of the 350-rand unemployment grant required further investigation.

Regarding government departments' purchases of personal protective equipment against the COVID-19 outbreak, the report found that "items were priced at more than double, or even five times, the prescribed price".

In a separate briefing, Labour Minister Thulas Nxesi said the commissioner of the Unemployment Insurance Fund, responsible for paying out jobless claims, had been suspended along with three other executives as a result of Makwetu's report.

"This allows the SIU to complete its forensic investigation completely unfettered," Nxesi said. "This is not the end of the matter...We are following all the money."

South Africa's unemployment rate, at over 30% of the workforce, is among the highest in the world and has been repeatedly cited by ratings agencies as a potential source of social and economic instability.

The government has been buffeted in recent weeks by reports of graft during the coronavirus crisis, putting President Cyril Ramaphosa under pressure as he has pledged to clean up his African National Congress party's reputation after a decade of scandals under his predecessor, Jacob Zuma.