SA Has Lost R233 Billion To Fraud and Inflated Prices – Treasury


Despite tight policies that could help seal up government’s leaking pockets through SA’s wasteful spending, Treasury says state government still lose over R233 billion to careless and inflated Prices.

This is according to Bloomberg  which reported the wasteful spending of state’s yearly budgets.

The business site reported that Kenneth Brown, SA’s chief procurement officer said no lesser that 40% of the country’s R600 billion budget for goods and services is overly being eaten up by fraud and inflated prices of goods bought through suppliers.

Read Also : Corruption Hotline Engenders Recovery Of R340 Million

In an interview  in Pretoria, the 54-year-old chief procurement officer cited the binding machine as an example of the massive waste that means as much as 40 percent of the government’s 600 billion rand ($44 billion) budget for goods and services is being consumed by inflated prices from suppliers, and fraud.

“It means without adding a cent, the government can increase its output by 30 to 40 percent,” he said

“We could be building more roads, more schools without even adding more money to the current budget.”

The example cited by the concerned SA citizen is just one of the numerous means government at all levels wastes tax payers money. In Tshwane for instance, a recently leaked document revealed that a patronage network of over 40,000 suppliers were acting as middlemen selling common products to the municipality at highly inflated prices.

The document also said the transactions were limited to R30,000 per transaction so as to avoid having to go through tender processes.

Since 2013 when the office of South Africa’s chief procurement officer was established, Kenneth Brown and his team have been at their best in ensuring that SA’s wasteful spending is curtailed at a very high percentage.

The office also renegotiates business deals that’s taken on new urgency as South Africa faces a possible credit-rating downgrade to junk and the finance Minister Pravin Gordhan pledged to work with the office to ensure the SA monies to put to good use.

Other SA departments, like the Department of Public Works (DPW) have vowed to recover millions of rands from consultants and construction companies for overcharging on government projects.

Read Also: SA Corruption Spreads Like Virus Because Zuma Is ‘Sponsor-In-Chief Of Corruption’ – Pityana

The department has till date, issued summons to reclaim a total of about R67 million which was over-paid in two projects.

To this, Brown said when government clamps down on its over rated transactions, it would be able to increase its output by as much as 40%, without having to spend a cent.

“We could be building more roads, more schools without even adding more money to the current budget,” he said.

Speking on the Browns’s role in curtailing SA’s wasteful spending of money, Ralph Mathekga, a political analyst at the Johannesburg-based research group, Mapungubwe Institute of Strategic Reflection, said self-centered politicians are unhappy with his investigations into procurement

He said majority of  the  ANC-aligned politicians say Kenneth Brown’s office and the whole Treasury has too much power to the point they can frustrate the SA political decisions,

“It appears their work has become a nuisance to the ANC. It looks like the party is becoming indifferent towards anti-corruption.” he said