The Public Protector’s report on Nkandla has unleashed a storm of anger. Radio shows and newspaper columns have been filled with people complaining about the state spending vast sums on upgrading the President’s private residence. Rightfully, they have pointed out that it is wrong that the state spent R248-million on the project – money, which could have been spent on housing, healthcare and service delivery for the public.

However, when it comes to analysing how Nkandla could happen and what it represents, most of the analysis has been shallow. In fact, the analysis of why the Nkandla scandal happened and what it symbolises has often taken on racist undertones or has merely been put down to the personal greed of President Jacob Zuma. While Zuma has been mired in endless corruption scandals, Nkandla points to bigger problems beyond the character of the President or his propensity for corruption. In fact, it points towards problems associated with neoliberalism, class rule, and even how the state under capitalism is a site of accumulation for the ruling class

How Politicians Get Rich through the State

In society, the state plays a central role in protecting the interests of the ruling class. In capitalist societies this has seen states protecting and furthering the interests of elites. As such, state resources are often skewed disproportionately towards meeting the needs of the rich.

But the state can also be used as a site by an elite to accumulate wealth. In recent history this was evident in countries that were emerging from colonialism. In such countries, indigenous business people often did not exist - due to colonialism and the positioning of these countries in the international capitalist order - and for an emerging elite the state offered one of the few paths to accumulate wealth. As such, many Third World elites used newly independent states and their links to elites in the First World to amass private wealth - sometimes on a very large scale.

However, even in North America and Europe, being positioned high in the state offered and offers opportunities to amass wealth. Along with the perks that holding high office within the state brings – including large salaries – this has often also taken the form of corruption, including bribery by private capital. For example, in 1961 the West German Minister of Defence was paid a bribe of over R100 million in order to ensure that the West German state bought fighter jets from Lockheed. Thus class rule, states, capitalism and accumulating wealth have always gone hand in hand and have often involved outright corruption.

Accumulation through the State in South Africa

By the time apartheid fell, South Africa had developed a local capitalist class. However, due to apartheid, this class was almost exclusively white. Aspiring capitalists linked to the ANC, who wanted to own large private companies, were frustrated by these capitalists. In fact, ownership of large corporations still remains largely in the hands of white businesspersons.

This has meant that for an aspiring elite around the ANC, like in many other former colonial countries, the state has offered the most viable way to accumulate wealth. This is why an ANC-linked elite has used the state to open up business opportunities for themselves. The ANC and the state’s relations with businesspeople like the Guptas is an example of this. It is also why managers within state-owned companies have been rewarded huge salaries.

Meanwhile, there have been on-going scandals linked to this phenomenon of using the state to accumulate private wealth. One need only think back to the arms deal. Nkandla is a continuation of this and arises because the state is being used as a site of accumulation. Zuma’s lavish homestead is an outcome of and symbol of accumulation via the state. In fact, President Zuma is not alone in using the state to upgrade his own property. Recently the state spent millions refurbishing ministers’ houses. Tens of millions were also spent on the properties of former presidents Thabo Mbeki and Nelson Mandela.

But using the state to get rich goes beyond simply improving private houses. The upgrade of properties is simply part of a larger drive to make money out of the state and open business opportunities through it. In some ways this echoes how an Afrikaner elite used the state to accumulate wealth and business opportunities in the face of the dominance of white English-speaking capitalists under apartheid. 

Neo-liberalism Has Made Things Worse

Under neoliberalism, however, the practice of officials using the state to secure private wealth has become even worse. Privatisation and tendering via public-private partnerships offers state officials, their family members and people that are politically connected the opportunity to become extremely rich. Since South Africa embraced neoliberal policies, outright corruption associated with privatisation and tendering across the world has also grown – and like all countries ours has not been immune.

One need only think of the state tenders to build the World Cup stadiums. These were awarded to the largest construction companies in South Africa, like Murray and Roberts. It has become clear that such companies colluded with one another to inflate their prices and accumulate wealth fraudulently through this. Nkandla is another example. Zuma’s desire for a private palace is not the only reason behind Nkandla’s hefty price tag. Its construction also became expensive because contractors inflated their prices. The architect’s fees alone were R18.6 million.

Nkandla, therefore, arises out of and represents how the drive to maximise profits has intensified state corruption, and how both businesspeople and state officials are using the state as a site to accumulate private wealth.

People should, therefore, rightfully be angry about Nkandla. They should fight against this and other forms of corruption. But this fight should not get sidetracked into just the personal flaws of Zuma because it represents far more than this. It demonstrates how the ruling class uses the state, as a site of accumulation - and also that it is a systemic problem. To fight corruption we should be fighting the state as an instrument of the ruling class, and perhaps more importantly, we should be challenging the neo-liberal model of capitalism.

Written by Shawn Hattingh, Researcher and Educator for the International Labour Research Information Group in South Africa.

First published by The South African Civil Society Information Service.

A nonprofit news agency promoting social justice. Seeking answers to the question: How do we make democracy work for the poor?