Corruption and Its Impact on the Economy

17 June 2021 Dr Kershen Pillay, CEO of the Graduate Institute of Financial Sciences (GIFS)
Dr Kershen Pillay, CEO of the Graduate Institute of Financial Sciences (GIFS)

Dr Kershen Pillay, CEO of the Graduate Institute of Financial Sciences (GIFS)

Conversations that matter, though sometimes uncomfortable, are necessary, as introspection and healthy debate are critical for the advancement of any industry. With corruption being arguable endemic in all strata of South African society, it is time for corporate SA to proactively tackle this inconvenient truth.

It is incredulous and inconceivable that South Africa has reportedly lost almost R15-billion to corruption since 2020*. For a country in the throes of economic turmoil, the ongoing staggering misappropriation of funds aggressively fuels inequality, impedes progress, and encourages a pervasive air of anger, mistrust and resentment across all layers of society.

While civic society and the media continue to unmask corrupt practices, an enhanced collaborative effort is required on the part of the private sector to stop the proverbial buck to achieve positive, sustainable change. For the Financial Services Industry, this translates into a solid, enterprising game-plan to shore up transparency through better and more open processes, to combat vested interests, to refuse to engage with unethical individuals and organisations, to introduce tighter professional and accountability systems, and to fundamentally change mind-sets.

To get a sense of what turnaround measures are required from an industry and societal level, the Graduate Institute of Financial Sciences (GIFS) invited four experts to a virtual IIG Insights Session on 9 June 21. The robust discussion centered around the impact of corruption on South Africa’s economy, the proliferation of a loot mentality across society, and the role of the Financial Services industry is stemming the tide of corruption.

Hard-hitting questions were posed to Professor Bheki Mngomezulu, Political Analyst and Full Professor of Political Science at the University of the Western Cape; Mpume Langa, Divisional Finance Director at Unilever Africa, Chair of Women in Business and former Head of Absa Private Bank KZN; Wendy Knowler, award-winning Senior Consumer Journalist and board member for the Ombudsman for Banking Services, South Africa; and Praline Ross, CEO and Founder of Aqua Empowerment Solutions, Mindset Coach, Change Strategist and Edupreneur.

Making it clear that “we have normalised an abnormal situation”, Professor Mngomezulu laid the responsibility squarely on the shoulders of every South Africa citizen and business, and called for a more robust judiciary system and the implantation thereof. To effectively turn the moral compass, he stressed, we need to go back to the Ubuntu Philosophy and take a telescopic view for which we are all accountable. He also urged the Financial Services Industry to self-check with questions such as: If we all allow corrupt behaviour, what will the overarching impact on our country be? How can business effectively operate in an environment mired by corruption?

Mpume Langa urged banks to step up accountability and robustly enforce the law. “Corruption is about the flow of money - where it comes from and where it flows into.” She urged banks not to unfreeze accounts while investigations are underway “because if we control the money, we control the behaviour.”

Mindset guru, Praline Ross, says a transition from ego-system awareness to eco-system awareness which moves the focus from self and personal power and status to the collective will help turn the tide. She called on the Financial Services sector to create more platforms to educate the nation on the importance of purposeful, mindful leadership and checking ourselves against our value systems.

While agreeing that it starts with Self, Wendy Knowler drew on her decades of experience as a consumer journalist and banking ombudsman board member to exhort the Financial Services Industry to do some sense-checking of its own. “If there are more TCF (Treat Customers Fairly) measures in place within the sector, consumers are less likely to feel ethically entitled to cheat the system.”

Ultimately, corruption is abuse. Each day we allow corruption to happen, we knowingly allow ourselves and future generations to be abused. If South Africa is to be resolute in reigning in selective morality and ethics lapses, a concerted effort on the part of government, the private sector, and civic society is required. However, intrinsically, the battle against corruption starts with Self. It starts in our homes. It starts with the way we raise our children. It starts with cultivating robust moral compasses.

The full session of the IIG Insights Session hosted by GIFS can be viewed at here.

Dr Kershen Pillay
CEO: The Graduate Institute of Financial Sciences (GIFS)

*Ferial Haffajee, Daily Maverick, 7 June 2021

The panel of experts who participated in the IIG Insights Session hosted by GIFS

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