BETRAYAL OF THE PROMISE: HOW SOUTH AFRICA IS BEING STOLEN

The report describes a 'silent coup' in South Africa where a power elite centered around President Jacob Zuma and the Gupta family established a symbiotic relationship between the constitutional state and a 'shadow state'. This network repurposed state-owned enterprises (SOEs) and government departments to redirect public rents into private hands. The authors argue that the rhetoric of 'radical economic transformation' (RET) was used as a smokescreen for this systemic looting. Key mechanisms of capture included the manipulation of SOE boards, the ballooning of the public service to ensure political loyalty, and the subversion of security and intelligence agencies to protect the network and neutralize opposition. The report highlights specific cases of corruption at Transnet, Eskom, and Denel, and warns that the proposed Russian nuclear deal is a primary vehicle for massive future rent extraction.

• South Africa has experienced a 'silent coup' where a Zuma-centred power elite built a symbiotic relationship between the constitutional state and a 'shadow state' to repurpose state institutions for rent-seeking.
• The 'radical economic transformation' (RET) ideology has been co-opted as an 'ideological smokescreen' to mask the private enrichment of the power elite and justify the subversion of constitutional and legal frameworks.
• The Gupta family acted as strategic brokers and 'fixers', using their access to President Zuma to facilitate state capture and move illicit funds through transnational networks, including shell companies in Hong Kong.
• State-owned enterprises (SOEs), specifically Eskom and Transnet, were repurposed as primary vehicles for large-scale looting and the consolidation of financial resources for the power elite.
• The power elite sought to centralize control of rents by capturing the National Treasury, which would grant them control over the Financial Intelligence Centre, the Chief Procurement Office, and the Public Investment Corporation.
• The public service was intentionally expanded to create a 'compliant politically-dependent, bureaucratic class', while 'good cops' in police and intelligence services were replaced by loyalists.
• Executive governance was hollowed out, with the formal Cabinet being replaced by informal 'kitchen cabinets' of elites who compete for Zuma's favour.
• The proposed nuclear deal with Russia is viewed as a strategic tool for the power elite to extract massive rents and grant Russia financial control of the economy via sovereign guarantees, despite being economically unaffordable.
• The Gupta network utilized shell companies, such as Homix, to launder money through a process of placement, layering, and integration, moving funds to entities like Bapu Trading and accounts in Hong Kong.
• The 'Premier League'—a network of provincial party bosses—was consolidated to ensure the ANC's National Executive Committee remained loyal to the Zuma-centred project.

APA

Bhorat, H., Buthelezi, M., Chipkin, I., Duma, S., Mondi, L., Peter, C., Qobo, M., Swilling, M., & Friedenstein, H. (2017). BETRAYAL OF THE PROMISE: HOW SOUTH AFRICA IS BEING STOLEN. Public Affairs Research Institute. https://pari.org.za/wp-content/uploads/2017/05/Betrayal-of-the-Promise-25052017.pdf

Chicago

Bhorat, Haroon, Mbongiseni Buthelezi, Ivor Chipkin, Sikhulekile Duma, Lumkile Mondi, Camaren Peter, Mzukisi Qobo, Mark Swilling, and Hannah Friedenstein. BETRAYAL OF THE PROMISE: HOW SOUTH AFRICA IS BEING STOLEN. Public Affairs Research Institute, 2017. https://pari.org.za/wp-content/uploads/2017/05/Betrayal-of-the-Promise-25052017.pdf.

Wikipedia

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BibTeX

@techreport{bhorat2017betrayal, author = {Bhorat, Haroon and Buthelezi, Mbongiseni and Chipkin, Ivor and Duma, Sikhulekile and Mondi, Lumkile and Peter, Camaren and Qobo, Mzukisi and Swilling, Mark and Friedenstein, Hannah}, title = {{BETRAYAL OF THE PROMISE: HOW SOUTH AFRICA IS BEING STOLEN}}, institution = {Public Affairs Research Institute}, year = {2017}, month = may, url = {https://pari.org.za/wp-content/uploads/2017/05/Betrayal-of-the-Promise-25052017.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }