The investigation into corruption, fraud, and other irregularities involving the agency responsible for promoting the Northern Cape as, amongst others, a prime trade and investment destination is “long overdue”, and “the scope of investigation is too narrow”.
The recent “long overdue” proclamation by Pres. Cyril Ramaphosa that the Special Investigative Unit (SIU) must look into the Northern Cape Economic Development, Trade and Investment Promotion Agency (NCEDA) has been welcomed by the DA.
Cope agrees, but says the scope of the investigation is too narrow, as projects like the Maloof Money Cup skateboarding events, the Upington Special Economic Zone (SEZ) and others must also be investigated.
“For too many years our questions in the committees and legislature about the actual achievements of overpaid officials flying all over the world went unanswered.
“There is no economic development and growth in the province,” says Cope national committee member Pakes Dikgetsi.
Probing into seven contracts
This comes as the SIU announced that Proclamation R151 of 2024 authorised it to probe the procurement and contracting for seven contracts.
The investigation will also focus on maladministration, malpractice, corruption and fraud. The probing will scrutinise the procurement of legal services; event organising and management services; consultancy services; security services; services relating to the Riemvasmaak Tourism Master Plan; catering services and an audio-visual system.
Furthermore, the SIU will probe any unauthorised, irregular, or fruitless and wasteful expenditure incurred by the NCEDA or the state and this includes any unlawful or improper conduct by officials or employees of the NCEDA, the applicable suppliers or service providers or any other person or entity.
On its website the NCEDA states its mission as achieving the promotion of the Northern Cape as a business-friendly province through seeking sustainable growth; facilitating the creation of a conducive environment for trade and investment; increased focus on attracting investment; promoting trade; pursuing economic development; and constantly striving for sustainable and quality job creation.
Its mandate is to plan and assist with business enterprise and rural development; provide funding in respect of approved enterprise development; engage in project management; engage in the development and management of immovable property; and promote foreign trade and investment.
Unqualified audit findings
For the past three financial years the NCEDA obtained unqualified audit findings, whereas before it was qualified.
In the latest annual report, the Auditor-General South Africa (AGSA) states that the full extent of irregular expenditure presented has not yet been determined:
“Disciplinary steps taken/criminal proceedings for the term 2010 to 2022 – a full investigation was concluded and three cases were submitted to the SIU for investigation.
“In one of the matters a senior staff member of the entity was suspended, and the hearing will be held during the 2023-’24 financial year. The entity is awaiting feedback from the SIU in terms of the other two cases. The irregular expenditure was investigated in 2022-’23, and an irregular outcomes report was submitted to provincial treasury.”
‘It took 11 years to complete paperwork’
Dr Isak Fritz, DA Northern Cape provincial leader, says they have been calling for investigations and interventions at the NCEDA.
“Residents bear the brunt of an entity that does not contribute meaningfully to the provincial economy.
“The extent of mismanagement and maladministration at the NCEDA is best exemplified by the fact that it took 11 years to complete the paperwork for a special economic zone, which was originally intended for a different part of the province entirely.
“Making one acting employee responsible for everything done by the entity invalidates all the checks and balances that are supposed to be in place to prevent misuse of power, abuse of funds, dereliction of duty, and other forms of misconduct.”
Fritz says the MEC for Finance suggests that the entity can function without a board until the mega-entity is established.
“With an unemployment rate of 42%, the Northern Cape needs a provincial business entity that is geared for economic growth.
“Unfortunately, neither the Ramaphosa nor the Dr Zamani Saul (premier) administrations have proven that they have the right political will.
“The NCEDA only created a favorable economic climate for cadres,” Fritz says.
Agency ‘welcomes effort’, ‘in full support’ of investigation
In reaction to the SIU investigation announced on 12 February, the NCEDA issued a statement on 15 February.
Some of the remarks in the statement are:
The current NCEDA is known as an institution of integrity, professional values and being well governed.
The latest SIU statement is acknowledged and the NCEDA welcomes this effort and is in full support.
Noting the content and the focus areas, it is within the timeframe of 2011 to 2019 predominantly.
From the abovementioned it is crucial to refer to the history of the NCEDA. The entity was initiated as a Public Finance Management Act schedule 3C entity in 2010. This after being an Industrial Development Corporation (IDC) initiated private company since 2002 focused on socio-economic development projects.
The era in question is exactly the era of establishment of a new, broader mandate and introducing very strict Public Finance Management Act (PFMA) systems and policies to be compliant to.
As from 2020 NCEDA was able to stabilise the institution in terms of governance, systems and policies and turned into a high-performance institution advancing the realisation of the Namakwa SEZ, Boegoebaai Harbor, proposed Boegoeberg SEZ, Upington Industrial Park and hosted several macro private sector investments.
To enable this, the NCEDA had to submit the years 2012 to 2019-’20 for review to an Irregular Investigation Committee consisting of internal and external committee members. A detailed report and action plan was proposed and implemented.
The NCEDA is annually audited by the AGSA and has for the past few years received unqualified audit opinions and is advancing towards a clean audit.
“We will continue to cooperate fully with the SIU and any other relevant authorities throughout this process.
“Furthermore, we reiterate our commitment to upholding the highest standards of ethical conduct and transparency in all our dealings.
“Any findings arising from these investigations will be thoroughly reviewed, and appropriate actions will be taken to address any identified shortcomings.
“We remain steadfast in our dedication to serving the public interest and ensuring the responsible use of public funds,” the agency stated.
