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Part 3 Some Specific Aspects of Corruption and Constitutionalism, 16 The ‘Financial Constitution’ and the Prevention and Combating of Corruption: A Comparative Study of Nigeria, South Africa, and Kenya

Nico Steytler

From: Corruption and Constitutionalism in Africa

Edited By: Charles M. Fombad, Nico Steytler

From: Oxford Constitutions (http://oxcon.ouplaw.com). (c) Oxford University Press, 2022. All Rights Reserved.date: 26 November 2022

(p. 386) 16  The ‘Financial Constitution’ and the Prevention and Combating of Corruption

A Comparative Study of Nigeria, South Africa, and Kenya

1.  Introduction

The executive collects money from the public through taxes and in turn spends it for the public’s benefit—this is the social contract simply put. The contract, however, is breached more often than respected. Taxes are collected selectively (members of the executive, along with their coterie of friends and family, evade taxation with the connivance of the tax collector), leaving less money for public expenditure—at the expense of the public. Moreover, these taxes are not all expended for the public benefit: some of it is siphoned off to the benefit of, again, members of the executive and their coterie of friends and family—at the expense of the public.

The former group enjoys a double bonus: paying less tax while getting a greater share of the benefit of what tax is collected. Conversely, the public is hit by a double whammy: less money for public services, with less of it—potentially much less—reaching intended beneficiaries. Such an abuse of revenue-raising and -expending authority creates, furthermore, a vicious cycle in the economy, retarding growth (including employment), thereby delivering less revenue, and thereby retarding growth and revenue even more, ad infinitum.

Set against this, it is the case that the principal aim of a constitution is to regulate and limit state power, or, put more forcefully, to prevent its abuse. The principal source of state power is money. Therefore, constitutions are concerned with, among other things but nonetheless fundamentally, the regulation and limitation of the raising and expending of public money, including in particular its abuse for private ends.

In Anglophone Africa, the constitutional regulation of public money exhibits the following features:

  • •  a democratically elected parliament authorizes the raising of revenue;

  • •  a semi-autonomous revenue authority collects the revenue;

  • •  all revenue the government raises is deposited in a single revenue fund (barring a few explicit exceptions);

  • •  a democratically elected parliament authorizes withdrawals from the single revenue fund by means of an Appropriations Act, subject to some limitations;

  • •  independent bodies determine or advise on aspects of expenditure;

  • (p. 387) •  an independent body (Controller of Budget) ensures ex ante that expenditure decisions comply with the Appropriations Act;

  • •  an independent body (Public Service Commission) controls the largest expenditure item—personnel appointments—to ensure value for money and prevent nepotism;

  • •  an independent office (Auditor-General) reviews post hoc the financial statements and transactions of state entities;

  • •  a national treasury is established;

  • •  a legislature oversees the legality and appropriateness of the spending of the appropriated funds; and

  • •  an independent central bank maintains the value of the currency.

These features express the basic principles of constitutionalism. First, the raising and expenditure of funds are subject to democratic decision-making; secondly, the expenditure of funds is subject to limitations, including the separation of powers; thirdly, the raising and expenditure of funds are subject to the rule of law; and, finally, the expenditure of funds should be for a public (developmental) purpose.

These basic principles have evolved into a particular constitutional architecture which, if followed, could prevent the routinization of corruption. Yet, the art of corruption—the use of state funds for non-public purposes—has been perfected in many an Anglophone African country. The question, then, is: Why has a constitutional system, one entrenching constitutionalism, failed to produce the desired outcome and resulted instead in the opposite—the neopatrimonial state?

It is argued here that although there is a constitutional architecture (with maybe a few minor gaps), there is no embracing of constitutionalism as an organizing principle of governance, a situation which inevitably subverts the financial constitution, bringing dire consequences with it.

The term ‘corruption’ is used in this chapter in a narrow sense: the use of public money by state officials for private gain rather than a public purpose. This includes both the failure to collect taxes owed and the misuse of such state resources when collected.

This chapter commences with a brief sketch in Section 2 of the historical roots of the Anglophone model of ‘financial constitutions’, followed in Section 3 by a description of the constitutional rules in three Anglophone African countries: South Africa, Nigeria, and Kenya. They are not only the largest economies in Africa, but have all undergone large-scale constitutional reform since the 1990s. A less ennobling common denominator is that Nigeria and Kenya rank very high on a corruption index, with South Africa rising to meet them on that same index.

The linkages between financial rules and constitutionalism are examined in Section 4, while Section 5 explores the gap between the financial constitutions themselves and the reality of the rampant corruption in all three countries. The chapter concludes with a few comments on the nature of financial constitutions and how to make them effective.

2.  The Anglophone model of financial constitutions

The financial constitutions of Anglophone countries are firmly rooted in the English model of public finance management as it evolved over the centuries. In the 1915 edition of his famous work, Introduction to the Study of the Law of the Constitution, then already in its (p. 388) 8th edition,2 AV Dicey, the founding father of British constitutionalism, describes the basic elements of the unwritten British ‘financial constitution’ as follows.

Firstly, all tax revenue flows from the authority of Parliament: ‘all taxes are imposed by statute, and … no one can be forced to pay a single shilling by way of taxation which cannot be shown to the satisfaction of the judges to be due from him under Act of Parliament’.3 This central principle was wrested from the Monarch by the democratic Parliament and asserted in article 4 of the Bill of Rights of 1689 that the raising of taxes was a matter for Parliament and not the Crown.

Secondly, all revenue received by the Inland Revenue Office is deposited in the Bank of England to the account of his Majesty’s Exchequer (a consolidated fund).

Thirdly, while not a shilling of tax may be collected without an authorizing Act, ‘not a penny of revenue can be legally expended except under the authority of some Act of Parliament’.4 Such Acts may be permanent or annual; a permanent Act imposes a direct charge on the Exchequer, while an annual Act provides for appropriations for public services for a financial year.

Fourthly, there must be some guarantee that the appropriated money is spent for the authorized purpose. To Dicey’s question—‘What, it may be asked, is the real security that moneys paid by the tax payers are expended by the government in accordance with the intention of Parliament?’—the answer is, ‘an elaborate scheme of control and audit’.5 The control element is executed ex ante by the Comptroller General (authorizing payments from the Exchequer only under legal authority), while the Auditor-General performs the audit function post hoc. At the time, the two functions were performed by one person—‘a high official, absolutely independent of the Cabinet; he can take no part in politics’; furthermore, he is ‘appointed by a patent under the Great Seal, holds his office during good behaviour, and can be removed only on an address from both Houses of Parliament’.6

The task of the Comptroller is no mere formality, Dicey informs us, because ‘it gives an opportunity to an official, who has no interest in deviating from the law, for preventing the least irregularity on the part of the government in the drawing of public money’.7

Fifthly, the audited accounts are submitted to the Public Accounts Committee of the House of Commons for examination. This, Dicey again assured his readers, ‘is no mere formal or perfunctory supervision’, noting that ‘a glance at the reports of the Committee shows that the smallest expenses which bear the least appearance of irregularity, even if amounting only to a pound or two, are gone into and discussed by the Committee’.8

In sum, Dicey approved of the following summary of the system:

The gross revenue collected is paid into the Exchequer.

Issues from the Exchequer can only be made to meet expenditure which has been sanctioned by Parliament, and to an amount not exceeding the sums authorised.

The issues from the Exchequer and the audit of Accounts are under the control of the Comptroller and Auditor General, who is an independent officer responsible to the House of Commons, and who can only be removed by vote of both Houses of Parliament.(p. 389)

Such payments only can be charged against the vote of a year as actually came in [the] course of payment within the year.

The correct appropriation of each item of Receipt and Expenditure is ensured.9

Dicey then smugly boasted:

The general result of this system of control and audit is that in England we possess accounts of the national expenditure of an accuracy which cannot be rivalled by the public accounts of other countries, and that every penny of the national income is expended under the authority and in accordance with the provisions of some Act of Parliament.10

The system was not ‘constitutionalized’ in the modern sense of forming part of a supreme law: since Britain prided itself on its unwritten constitution, the elements of the model were captured in statute and practice. As a parting shot from the empire, this model became one of the cornerstones of the constitutions bequeathed to African states at independence, but following the wanton looting of the states that ensued, the constitutional reforms of the 1990s sought to strengthen it by expanding the restraints on expenditure decisions.

3.  The constitutionalization of the Anglophone model

Although the financial constitutions of South Africa, Nigeria, and Kenya exhibit distinct differences in detail, the basic structure is the same in each of them and reflects the Diceyan model: guided by the aim of preventing and combating corruption, a number of key institutions and processes exist to regulate and control the conduct of the legislature and executive alike—the legislature’s act of raising taxes, the executive’s act of expending it, and the legislature’s act in turn of holding the executive to account for this expenditure.

It is these institutions and processes which are the focus of this chapter: not general principles of financial management, such as the promotion of ‘transparency, accountability and the effective financial management of the economy, debt and public sector’,11 but the institutions and institutional mandates that have to give effect to these lofty ideals.

3.1  An Act of Parliament necessary to raise revenue

In all three constitutions, the national legislature is the only authority that may raise taxes and other forms of revenue, which it does by means of legislation. Although the South African Constitution does not say in so many words that only legislatures may authorize the raising of revenue, the structure of the text makes it clear. The definition of a money Bill, which Parliament may or may not pass, states that it ‘appropriates money, imposes national taxes, levies duties and surcharges’ as well as ‘direct charges against the National Revenue Fund’.12

The role of Parliament is further strengthened by the provision that an Act of Parliament ‘must provide for a procedure to amend money Bills before Parliament’.13 It is thus no longer (p. 390) a case of the Minister of Finance giving Parliament a ‘take-it-or-leave-it’ choice: Parliament may engage directly in the budget formulation,14 and a Parliamentary Budget Office has been set up for this purpose. The Constitutional Court has also affirmed this basic principle: ‘the power of taxation and appropriation of government funds is reserved for legislatures’.15 Writing with reference to the Interim Constitution of 1993, the Court held that ‘[t]he executive have no power to raise taxes itself’.16

Although the Nigerian Constitution contains no provision which explicitly articulates the principle that only legislatures are competent to impose taxes, the National Assembly exercises its legislative powers in the fields listed on the federal list of competences, which includes specific taxes.17 The Kenyan Constitution is forthright: no tax or licence fees may be imposed other than in terms of ‘legislation’, be it national or county.18 However, since ‘legislation’ can include executive regulations made in terms of an Act of Parliament,19 full control by the legislatures is not secured.

3.2  Controls over the collection of revenue

The constitutions make no provision for an element of autonomy in the collection of taxes, a measure that could prevent the possible abuse of this executive power. Nevertheless, since the 1990s the establishment of semi-autonomous revenue authorities (SARAs) in Africa, particularly in Anglophone Africa, has been popular.20 These authorities, developed with the aim of depoliticizing tax administration,21 are supposed to enhance tax collection, reduce tax evasion and corruption, and provide better service to taxpayers.22

The Kenyan Constitution is the only one of the three to contain some provisions relating to tax collection, all of them aimed at avoiding the corruption that can arise through the non-collection of taxes or licence fees. First, any waiver of the obligation to pay tax must be authorized by law; in addition, the exercise of such power must be recorded as well as its reasons, and must be reported to the Auditor-General.23 Secondly, there is an absolute prohibition of any waiver to any ‘state officer’ by reason of the nature of the office or by reason of the person holding such office.24 The term ‘state officers’ includes the usual suspects among past tax shirkers: the president, ministers, members of legislatures, judges, and senior civil servants.25

(p. 391) Lying in the shadow of the constitutional institutions are the SARAs, separated from the civil service and removed from the direct control of the ministries of finance. The South African Revenue Service (SARS) is semi-independent from the Ministry of Finance, being ‘an organ of state within the public administration, but as an institution outside the public service’.26 It falls under the supervision of the Minister of Finance, albeit that the Commissioner of SARS is appointed by the President at his or her sole discretion.27

In Nigeria, the Federal Inland Revenue Service is similarly semi-autonomous in structure. So, too, is the Kenya Revenue Authority. Established in 1995, it is an agency of government falling ‘under the general supervision of the Minister of Finance’.28 It is governed by a Board of Directors, composed of a number of ministers as well as five external members that include the chairperson. The Minister appoints the Commissioner General upon the recommendations of the Board, but may dismiss the incumbent on a list of grounds, including ‘sufficient reason’, after consultation with the Board.29

3.3  Consolidated revenue fund

All the constitutions contain the requirement that all revenue collected must be deposited in a consolidated account, except when explicitly excluded by legislation. The rationale for this rule is that it underpins the decision-making role of parliament; as the latter has authority over withdrawals from the fund, its actual power is thus commensurate with the amount of revenue deposited in such fund.

The South African Constitution prescribes that ‘all money received by the national government must be paid [into a National Revenue Fund], except money reasonably excluded by an Act of Parliament’.30 It is important to note that even Parliament does not have a free hand to exclude money from this obligation at will; the reasonableness of an exclusion is subject to constitutional review.

The Nigerian Constitution, in section E of Chapter V on the National Assembly, entitled ‘Powers and Control of Public Funds’, also requires that all revenue raised or received by the executive must be paid into ‘one Consolidated Revenue Fund of the Federation’,31 a command repeated in the chapter on the Federal Executive in reference to a fund now termed the ‘Federal Account’.32 Exceptions to this rule are permitted in terms of either the Constitution or an Act of the National Assembly.33 The centrality of the Federal Account is that it underpins the federal system: any amount ‘to the credit’ of this Account ‘shall be distributed among the Federal and State Governments and the local government councils in each State’.34

The Kenyan Constitution too has a provision requiring that ‘all money raised or received by or on behalf of the national government’ be paid into the Consolidated Fund, subject to the usual exceptions: revenue ‘reasonably’ excluded by an Act of Parliament ‘into another (p. 392) public fund established for a specific purpose’, or allowed in terms of an Act of Parliament for an organ of state to defray its expenses.35

3.4  Act of Parliament necessary for withdrawals from consolidated revenue fund

As an element of democratic control, no withdrawals may be made from the consolidated revenue fund without the approval of Parliament expressed in an Act. This is accomplished through annual appropriation Bills or ‘permanent’ Acts imposing a direct charge on the fund.

As noted, it is a settled constitutional principle in South Africa that ‘the power of taxation and appropriation of government funds is reserved for legislatures’.36 This power, the Constitutional Court observed, ‘is a power peculiar to elected legislative bodies. It is a power that is exercised by democratically elected representatives after due deliberation.’37 The Constitution thus provides that money may be withdrawn from the National Revenue Fund only in terms of an (annual) appropriations Act or as a direct charge in terms of the Constitution or an Act of Parliament.38

As a ‘control measure’, the Nigerian Constitution emphatically also requires that any withdrawal from the Consolidated Revenue Fund take place in terms of the Constitution, an appropriations Act, or another Act.39 This rule applies as well to expenditure from any other fund containing public money.40 In Kenya, any withdrawal from the Consolidated Fund is permitted only in terms of an Act of Parliament or the Constitution itself.41

In addition, the three constitutions contain provisions limiting the discretion of the legislatures with regard to appropriations bills. First, constitutions may reflect the principle of a balanced budget by placing a brake on debt, for example by permitting borrowing only for infrastructural development and not for covering current expenditure. It is only in South Africa, however, that this principle has been constitutionalized specifically with reference to provincial and local government.42

Second, guidelines or rules may be imposed on how the revenue raised nationally should be divided among the different levels of government. In South Africa and Nigeria, such a division is made on the basis of principles, while in Kenya a minimum of 15 per cent of the national budget must be transferred to the counties.

Third, the Kenyan Constitution also creates an Equalization Fund with a life span of twenty years (which may be renewed) and receiving annually 0.5 per cent of the national budget; it is earmarked ‘to provide basic services including water, roads, health facilities and electricity to marginalised areas’.43

(p. 393) 3.5  Independent bodies determine or advise on aspects of expenditure

Placing unfettered trust in legislatures to go about their business in the best interests of the people they represent has often proven unwise—experience suggests their decisions can be informed more ardently by self-interest than one would assume was usually the case. As a result, a few constitutional institutions have emerged that either determine or advise on specific types of expenditure. Most prominent are independent commissions determining or advising on the salaries of politicians, lest the latter write themselves extravagant pay cheques; in multilevel state structures, where subnational governments depend to some degree on transfers from revenue raised nationally, commissions determine or advise on the division of revenue, lest the division be made on the basis not of equity but expediency.

The South African Constitution requires the establishment of an independent commission to make recommendations to Parliament and the executive on the salaries, allowances, and benefits of political office-holders at all three levels of government.44 In Nigeria, the Revenue Mobilisation Allocation and Fiscal Commission is included in the list of ‘Certain Federal Executive Bodies’,45 not because it falls under the federal executive but because it has executive powers in setting the upper limits of salaries and allowances for the President, Vice-President, the judiciary, and members of independent constitutional bodies.46

In Kenya, the Salaries and Remuneration Commission, an independent body, sets, and must regularly review, the remuneration and benefits of all state officers (including politicians), in addition to which it must ‘advise the national and county governments on the remuneration and benefits of all other public officers’.47

A feature of all three constitutions is the establishment of independent commissions to advise the national or federal legislature on how to allocate funds to subnational governments. Although this is no more than non-binding advice, the duty on the executive to provide reasons for its decisions introduces an element of rationality in an area that may otherwise smack of political partisanship.

In South Africa, the Financial and Fiscal Commission, an independent body (despite its being appointed by the President alone) must provide Parliament with annual recommendations on the division of revenue.48 The Nigerian Revenue Mobilisation Allocation and Fiscal Commission provides the President with advice on the allocation of funds from the Federal Account; it does so too with the National Assembly with regard to the formula of the horizontal division of revenue among states.49 The Kenyan Commission on Revenue Allocation, closely modelled on its South African counterpart, is an independent body that makes recommendations50 to Parliament about the division of revenue between the national and county governments.51

(p. 394) 3.6  Controller of Budget

The comptroller of the budget, featuring strongly in the Diceyan model, has not been recognized uniformly as a constitutional institution: in most Anglophone African countries the Accountant-General, located in the National Treasury, performs this function. The 2010 Kenyan Constitution is the only one that has elevated the Controller of Budget to an independent constitutional office. In the 1969 Kenyan Constitution, the office of the Controller and the Auditor-General was a single entity (based on the English model), with the imprimatur that the control and audit functions ‘shall not be subject to the direction or control of any other person or authority’.52

In the 2010 Constitution, the independence of this office is much more thoroughgoing by virtue of the appointment process and tenure: he or she is nominated by the President and approved by the National Assembly, for a single term of eight years.53 The office’s mandate is to oversee the implementation of budgets (national and county) and ensure that expenditure is in accordance with approved budgets (authorized by law); thus no withdrawal from the Consolidated Fund may be made without the approval of the Controller.54 In addition, the office supports the oversight function of Parliament by providing the two houses with reports every four months.55 One should also mention in this regard a further enforcement mechanism for the proper use of public funds: the Constitution itself imposes personal liability on ‘the holder of a public office, including a political office, [who] directs or approves the use of public funds contrary to law or instructions’.56

In South Africa, the Accountant-General performs the comptroller function, but is located in the National Treasury,57 with ever-diminishing powers of controlling expenditure, as is detailed in Section 5.5. In the absence of an independent controller of the budget, the independent functioning of the Treasury is thus of great importance. As in South Africa, Nigeria too has no independent office equivalent to a controller of budget. The function is performed by the Office of the Accountant-General, established by statute, and is an agency of the Ministry of Finance, which is responsible for the receipt and payments out of the Federal Account.

3.7  Independent bodies making expenditure decisions

As the salary bill of civil servants is the largest expenditure item in all three countries, it is also the area that poses the greatest danger for public funds to be abused through nepotistic practices and political appointments, both of which usually result in incompetent and unaccountable officials. The public is doubly short-changed: a substantial portion of funds is diverted into the pockets of persons not deserving of the remuneration and who deliver poor public service. Public Service Commissions are thus a feature of all three constitutions, though their powers differ markedly from each other.

The South African Public Service Commission is an independent constitutional body, but its remit is merely to promote the values of public administration, investigate complaints, (p. 395) and provide advice.58 It does not have executive powers, including the power to make appointments, but reports regularly to Parliament on the problems of cadre appointments.

In Nigeria, on the other hand, the Federal Civil Service Commission, also an independent institution,59 has executive authority to make all appointments to the federal civil service, barring those to a number of high-ranking semi-political positions (such as ambassadors), which are made by the President.60

In Kenya, the 2010 Constitution also sought to strip the executive of key expenditure decisions with regard to public service appointments. An independent Public Service Commission, which has to be avowedly non-political (no persons who held elected office in the national Parliament or a county assembly or in a party are eligible for two terms after such an election),61 appoints and dismisses public servants.62 A Teacher Service Commission is, in turn, responsible for the employment of teachers, the largest sector of public servants.63

3.8  The independent office of the Auditor-General

The independent office of the Auditor-General is a common feature in the constitutions under review. It audits the accounts of government and organs of government, expressing an opinion on the veracity of government financial statements (that is, on accounting), compliance (on authorization), and the achievement of set performance goals (on value for money).64 In auditing the financial books and making the results public through parliaments, the Auditor-General plays a key role in detecting and preventing fraud and the abuse of funds.65

The Auditor-General is usually appointed by Parliament and reports back to it, performing a supportive role in Parliament’s oversight function. This role, given its English origins, is very different to that of an equivalent French institution prevalent in Francophone Africa. Termed cour des comptes, the office forms part of the judiciary and thus has both an audit as well as a judicial function to address illegalities.66 Hence, within the Anglophone model, the utility of the Auditor-General’s reports depends on the strength of the system in which they operate: the accessibility and accuracy of the financial records kept by organs of state, and the strength of the legislatures to which they report to compel the executive to take corrective action.67

For its effective functioning, the office of the Auditor-General must be independent of the organs it audits, have the resources necessary to do the audit, enjoy editorial freedom, and (p. 396) have capacity to publish its reports promptly.68 Independence is usually measured against the establishment of the institution in the constitution, the appointment and dismissal at the hands of Parliament, editorial freedom, and a sufficient budget voted by Parliament.69

In the South African Constitution, the Auditor-General is one of the ‘State Institutions Supporting Constitutional Democracy’, the so-called Chapter 9 Institutions which include the Public Protector, the South African Human Rights Commission, and the Electoral Commission, all of whom are accountable to the National Assembly.70 The Auditor-General is accordingly independent, with security of tenure,71 and the mandate to ‘audit and report on the accounts, financial statements and financial management’ of all organs of state.72

Although powers of investigation (search and seizure) have been bestowed on the office,73 it can do no more than express opinions on its audit findings, with the ‘shaming’ of organs of state its strongest weapon.74 Where its audits expose corruption, the matter may be referred to the law enforcement agencies for criminal investigations.75 In the main it is supportive of Parliament in the execution of the latter’s oversight mandate.

Nigeria’s Auditor-General falls under the umbrella of the National Assembly, with the mandate to audit the accounts of government departments and report to the National Assembly.76 The Auditor-General’s powers of audit do not stretch, however, to ‘government statutory corporations, commissions, authorities, agencies, including all persons and bodies established by an Act of the National Assembly’.77 Its independence is guaranteed by both a declaration78 as well as its appointment procedure. The President makes the appointment on the recommendation of the Federal Civil Service Commission and the approval of the Senate,79 and an incumbent may be removed only on grounds of inability to discharge the functions or for misconduct, by a two-thirds vote in the Senate.80

Kenya’s Auditor-General is cast in a similar mode. The incumbent of this independent office is appointed by the President with the approval of the National Assembly for a non-renewable eight-year term.81 His or her removal, as with that of members of other constitutional commissioners, falls outside the powers of both the executive and the National Assembly. On the receipt of a complaint of violating one of the listed grounds for removal,82 (p. 397) the National Assembly, if it is satisfied that the complaint is well founded, refers the matter to the President, who must appoint an independent (semi-judicial) tribunal, whose rulings form a binding recommendation to the President.83

Within six months of the end of the financial year, the Auditor-General must submit to Parliament and county assemblies reports on all organs of state (including all bodies receiving money from the state, such as political parties) that ‘confirm whether or not public money has been applied lawfully and in an effective way’.84 In turn, these legislatures must, within three months, ‘debate and consider the report and take appropriate action’.85

3.9  The National Treasury

A feature of two of the constitutions is the constitutional status of the National Treasury. Although not independent, it is the only government department which has this elevated status, as it is enjoined with a mandate that supersedes ordinary service delivery beyond political mandates: it must look after the health of the government’s financial management system, which by definition would include the prevention and combating of corruption. In the absence of an independent controller of budget, the Accountant-General is located in this department, with the expectation that the function is performed independently.

The South African Constitution requires the establishment of ‘a national treasury’, the task of which is to ensure, broadly, ‘transparency and expenditure control in each sphere of government’.86 It is also given direct enforcement powers, including the stopping of transfers of funds to an organ of state which ‘commits a serious or persistent material breach’ of uniform treasury norms and standards, a power subject to the control of Parliament.87

Kenya largely copied the South African constitution with regard to a National Treasury. Under the heading ‘Financial control’, article 225 provides that an Act of Parliament must provide for the establishment and role of the National Treasury. The Minister of Finance (cabinet secretary for finance) also has the power to stop transfers to departments and counties, subject to parliamentary checks and balances.

The Nigerian Constitution contains no direct reference to a National Treasury or an Exchequer. The Ministry of Finance is a federal department with responsibility over a number of agencies and parastatals, including the Office of the Accountant-General.

3.10  Parliament’s oversight role

In the Montesquean model of the separation of powers, Parliament exercises an oversight role over the implementation of the legislation it has passed, including the budget, thereby holding the executive to account.88 All the national legislatures of the three countries are endowed with the responsibility of exercising oversight over state expenditure. The South African Parliament’s function, apart from considering and passing legislation, is to hold the (p. 398) executive organs of state accountable.89 The Nigerian Constitution draws an explicit link between its function of authorizing appropriation, overseeing the expenditure of the funds so appropriated, and the problem of corruption. Each House of the National Assembly has the power to investigate any department or person charged with implementing an appropriation Act, with the goal of exposing ‘corruption, inefficiency or waste in the execution or administration of laws within its legislative competence and in the disbursement or administration of funds appropriated by it’.90

The Kenyan Constitution, apart from providing for Parliament’s usual oversight function over the executive, also empowers Parliament to call on the Minister of Finance to provide information on any loan the executive has taken.91 A key tool for the effective execution of this oversight task is the Auditor-General’s report on the expenditure of organs of state in terms of the annual budget vote.92

3.11  An independent central bank

In a push for greater control over inflation, independent central banks have been included in constitutions, reflecting the revered status of the Bank of England. Their independence is usually measured by their constitutional status; by the governor’s appointment by the board of directors and not the executive; by protection against summary dismissal; and by their not having to follow executive instructions.93

With the principal aim of ensuring price stability by containing inflation, the argument for their independence is twofold.94 The first is theoretical: legislatures (and the executive) are biased in favour of inflation for short-term political gains, whereas a central bank must take a longer-term view, shielded from the politics of the day, to achieve price stability. Secondly, from an empirical perspective, the argument is that the greater the independence of such a bank, the less inflation has been, and low inflation is not an impediment to economic growth.95

A secondary function of a central bank is, as the lender of last resort, to ensure the stability of the financial system, including the supervision of the banking system. Through this supervisory function, a central bank plays an important role in combating corruption by monitoring and controlling money flows in and out of a country.

An independent central bank is a common feature in two of the constitutions, with Nigeria being the exception. The South African eserve Bank is recognized as the central bank, with the primary object ‘to protect the value of the currency in the interest of balanced and sustainable growth in the Republic’.96 Its independence is (p. 399) assured,97 but there has to be ‘regular consultations’ with the Minister of Finance.98 The appointment of the Governor of the Bank lies, however, in the discretion of the President, which is exercised after consultation with the Minister of Finance and the Bank’s board of directors.99 The Bank’s mandate includes ensuring the stability of the financial system and thus supervising the banking system.100

The independent101 Central Bank of Kenya’s constitutional duties are ‘formulating monetary policy, promoting price stability, [and] issuing currency’. No doubt in reaction to the glorification of imperial presidents in the past, notes and coins may ‘not bear the portrait of any individual’.102 The Chairperson and board of directors are appointed by the President with the approval of Parliament, and then hold office for a period of four years, which may be renewed once.103 The Governor, as the chief executive officer of the Bank, is also appointed by the President with the approval of Parliament.104

In contrast to the central banks of the other two countries, the Central Bank of Nigeria has no constitutional status as an independent institution: it is established by law that dates back to 1958 and underwent its most recent iteration in the Central Bank of Nigeria Act 2007. The Act proclaims the Bank an independent body105 with the principal aim, among others, to ‘ensure monetary and price stability’.106 The governor of the Bank is appointed for five years (eligible for a further five) by the President and requires the confirmation of the Senate by simple majority;107 however, his or her removal by the Senate needs the vote of two-thirds of the senators.108

4.  ‘Financial constitutions’ and constitutionalism

The survey of three Anglophone African countries shows that key measures to prevent and combat corruption have been constitutionalized. Underlying the financial constitutions is a distrust of the executive’s ability to impose, collect, and spend public money prudently, honestly, and in the public interest. The constitutional architecture thus subjects the power of the purse to democratic legislatures, independent institutions, and clear rules, all of which should be aimed at utilizing the purse for the public good (that is, development).

This scaffolding reflects the basic elements of constitutionalism, as developed in Africa.109 The first is democracy—that is, the establishment of accountable government. The second, (p. 400) that of limited government, entails the separation of powers between the legislature, executive, and judiciary, which provides for checks and balances and is undergirded by an enforceable bill of rights. Fombad adds to this element independent state institutions protecting constitutionalism, such as an ombudsman and a human rights commission.110 It has also been argued that devolution, the allocation of exclusive powers to subnational governments, additionally effects a vertical separation of powers.111

The third element is the rule of law—governance under rules and not by arbitrary discretion—which includes the supremacy of the constitution and its justiciability by an independent judiciary.112 Finally, the constitutional enterprise in Africa is not only about containing the state, but also directing its resources to a transformative or developmental goal.113 The process of constitutionalizing public financial management has thus made public financial management a central part of constitutionalism, as it both expresses and reinforces the central elements of this legal-political goal.

A central tenet of democracy since the Glorious Revolution in Britain and the Boston Tea Party and American Revolution has been the principle of no taxation without representation. Inasmuch as the levying of taxes must be grounded in the people’s sovereignty, mediated by their representatives, so too do they have control over the spending of taxes so imposed and collected. The South African Constitutional Court has thus stated that revenue-raising and spending ‘is a power that is exercised by democratically elected representatives after due deliberation’.114 At the core of such deliberative decision-making is the transparency of the process, which enables the accountability of legislatures to their electorates.

Allocating the authority to raise and appropriate revenue to the legislature, and the authority to spend the revenue so appropriated to the executive, effects a separation of powers that constitutes a check and balance. Moreover, entrusting the legislatures with the power to oversee the spending of revenue according to the purposes for which it was appropriated, strengthens the limitation imposed on the power of the executive. As the misuse of funds flourishes in secrecy, the transparency of the legislatures’ accountability processes, including the allowance of public participation, is the antidote to corruption.

In the Anglophone model, the presence of independent or semi-independent bodies with executive authority has been a common but not uniform constitutional feature: the controllers of budget, the public service commissions, auditors-general, and central banks have ever greater importance in limiting the government’s power. The development of these independent bodies with executive powers, the argument goes, does not necessarily contradict the democratic underpinnings of constitutionalism. The removal of certain decisions from both parliament and the executive has been an integral part of constitutionalism, such as is the case in the judiciary’s enforcement of the bill of rights. It happens increasingly too that independent bodies make decisions such as determining monetary policy or appointments to and dismissals from the public service.115 The independence of the central (p. 401) bank, for instance, is necessary for a long-term horizon beyond the politics of the next election.116

The removal of particular decisions from short-term political pressures, that is to say, becomes part of constitutionalism, provided there are sufficient checks and balances between this new branch of government and the others.117 For example, in keeping a central bank accountable in ‘the court of public opinion’, a key measure is the transparency of its goals, decision-making processes, and the decisions themselves.118

As Fombad argues, the emergence of a ‘fourth branch’ of government in the evolution of constitutionalism in Africa (which he calls ‘hybrid institutions’ since they may be in or outside the executive) occurred because of the need to hold government to account and to shield certain decisions from political expediency.119 Thus, their existence is not a violation of the separation of powers: ‘they do nothing more than fragmenting and limiting power to prevent tyranny, which is the very raison d’ȇtre of the doctrine’.120

At the heart of constitutionalism lies the rule of law, which also requires the justiciability of the constitution as the supreme law by an independent judiciary. The centrality of the courts is evident in Dicey’s own words, quoted above, that ‘no one can be forced to pay a single shilling by way of taxation which cannot be shown to the satisfaction of the judges to be due from him under Act of Parliament’.121 But the existence of rules is only as good as the courts’ ability and willingness to vindicate them. A prerequisite, then, for the rule of law is transparency in government decision-making as to its compliance or not with the law.

Compliance with the basic financial architecture should ensure the collection of revenue due and its proper expenditure according to the people’s preferences and aimed at the common good of equitable development. However, a distrust in legislatures’ wont to serve the entire population on an equitable basis has led to the latter’s budgetary discretion being curbed by mandatory set-asides for development. As we have seen, the Kenyan Constitution enjoins Parliament to allocate 0.5 per cent of the annual budget to an Equalization Fund. Furthermore, the entrenchment of socio-economic rights in the South African and Kenyan constitutions seeks to ensure that development also includes the poor.

As noted, the challenge for constitutionalism in Africa does not lie in its constitutional expression but in its implementation. As with other aspects of the constitution, the gap between the constitutional text and it implementation is also present with regard to the financial constitution.

5.  Why ‘financial constitutions’ fail to curb corruption

Dicey claimed that the British ‘financial constitution’ with its checks and balances produced the best results of financial probity.122 It should follow that the Anglophone model (p. 402) in Africa, having constitutionalized the safeguards and expanded upon them, would produce a similar if not better result. Quite the opposite is true, however.

In Transparency International’s Corruption Perception Index, the rating of these countries, compared to the 180 measured in 2017, is as follows.123 Nigeria, fuelled by oil riches, has been notoriously corrupt: 148th position in the world, with an indicated score of 27 out of 100, where 0 means highly corrupt and 100 very clean; and Kenya, a bit less corrupt: number 143 in the world, with a score of 25. South Africa’s position of 71st, with an indicated score of 43, shows an increase in corruption (in 2016 it occupied 64th position), no doubt after the revelations of state capture and widespread corruption at all levels of government.

As the African Development Bank and World Bank noted, ‘corruption is generally a symptom of governance failures’.124 Failure can be attributed either to incapacity and incompetence, or, more often, to predatory elites, both political and private, that exploit such incapacity and incompetence to capture state institutions. A brief scan of the practice relating to the key institutions and processes of the financial constitutions reveals how these elites have fundamentally undermined (or attempted to do so) the constitutional pillars of good financial management.

Special attention is paid to South Africa because, having once been held up as a beacon of hope for good governance, it has been treading the well-worn path of corruption.125 Over the past few years, a brash attempt was made to capture the state for private gain. The collusion between the Gupta family (from India), President Zuma and his family (jointly referred to as the ‘Zuptas’), and other political and private-sector beneficiaries sought and largely succeeded in dismantling state institutions for personal benefit.126 State and private investigations127 reveal an intricate and concerted effort to paralyse and capture all the key institutions of state, both financial and judicial, in order to loot the state.

With Zuma’s removal from the presidency in January 2018, the country’s new president Cyril Ramaphosa came to power with the avowed intention of cleaning up the state. He has dismissed a number of tainted ministers from the Zuma-appointed cabinet and appointed a commission of inquiry into state capture, chaired by the deputy chief justice, Raymond Zondo.128 The full extent of state capture is slowly being unfurled. Although the focus of the discussion falls then on South Africa, illustrative incidents of state corruption in Nigeria and Kenya are also recounted.

(p. 403) 5.1  Operating beyond Parliament’s revenue-raising powers

The first element of the financial constitution—the sole control of Parliament over the raising of public money—is dissipating thanks to the corporatization of the state. Major pillars of economic development, such as electricity generation and transport (air, rail, and road) are managed by state-owned entities (SOEs) that operate at arm’s length from the executive and even further beyond the reach of parliament. How they raise and spend money becomes isolated from the political process.

In South Africa, some of these SOEs (including Eskom, the electricity utility, and PRASA, the railway corporation) were captured by the Zuptas and had their revenue sources squandered at will. For example, Eskom, after imposing a penalty fine of ZAR2.1 billion on the mining company Glencore for providing unsuitable coal, reduced that penalty by 75 per cent when the Guptas bought the self-same mine (the latter occurring with the adroit assistance of the minister responsible for mining, a close Gupta associate).129

When an SOE’s revenue streams are inadequate, it requires government guarantees for loans and bailouts when the loans can no longer be serviced. Parliament comes into the picture only at the point when the bailout money must be approved, as discussed below.

5.2  Capturing semi-autonomous revenue agencies

A review of the performance of SARAs in developing countries shows that the establishment of such an institution is no guarantee of success.130 Arthur Mann argues that a SARA ‘without strong and honest leadership and the setting up of solid accountability mechanisms, may not only abuse its taxing powers but also become another source of governmental corruption’.131 Such leadership and strong internal procedures are necessary as ‘no SARA is an island’—it operates within a political and social context. A case study of Tanzania reveals that family and other networks increase the pressure on officials to accept bribes.132

South Africa is a prime example of how its semi-autonomous SARS, once a world-class agency, became ‘captured’, resulting in the failure to deliver on its mandate. The gutting of the institution has been exposed through investigative journalism and, at the time of writing, by the Nugent Commission of Inquiry into Tax Administration and Governance by SARS.133

Pravin Gordhan, first serving as the Commissioner of Inland Revenue and later as Minister of Finance in Zuma’s first cabinet, built up an effective tax agency, regularly surpassing annual collection targets and, among other measures, targeting high-profile figures for tax evasion. Once Gordhan was removed as Minister of Finance, Zuma appointed a former Commissioner of Correctional Services (who was dismissed from that post) and family friend, Tom Moyane. With his hands on the tiller, Moyane immediately commenced dismantling the organizational structure of the agency, with less-than-honourable intent.

(p. 404) When in November 2015 Gordhan was once more appointed Minister of Finance (against Zuma’s wishes),134 he sought to dismiss Moyane, with good reason, as the latter’s tolerance of corruption within SARS had become apparent.135 However, as Moyane had Zuma’s backing, Gordhan lost the dismissal battle. Instead, all the energy of the law enforcement agencies (by now captured by Zuma) turned on Gordhan, who was eventually prosecuted on a trumped-up charge relating to approving the early retirement of a SARS official ten years before.136

That Gordhan’s struggle for control of SARS was pivotal in the battle against corruption was apparent when it came to light that SARS, among other transgressions, accepted the Gupta brothers’ tax returns claiming an annual salary of about a million rand, whereas they were raking in billions each year through ill-gotten government contracts.137 They also received a VAT refund of ZAR70 million after intervention by Moyane.138

The end result is that a well-connected family not only benefited enormously from state contracts, but evaded their tax responsibility which such riches ought to have invoked. There are also allegations that Zuma himself had comfortable relations with SARS: for the first five years of his presidency he did not submit tax returns.139

5.3  Squirreling away revenue from the consolidated revenue fund

The cardinal rule that all revenue collected by the executive should be placed in a single consolidated revenue fund under the trusteeship of the legislature is ignored, facilitating the corrupt use of funds so squirreled away. Nigeria has been notorious for the failure to deposit all its revenue (mostly from oil) in the Federation Account. Even the office of the Auditor-General reported euphemistically in 2016 that executing its mandate of auditing this fund ‘raised a lot of interesting revelations and observations’.140

A recent example is that under the terms of an oil exploitation licence awarded to Shell and ENI in 2011, the companies paid USD1.1 billion into a separate off-shore account set up by the Nigerian Government, which then passed on the money to a company controlled by a former oil minister with rights over the oil block.141 The result is that large sums of oil revenue were not deposited in the consolidated revenue fund, money which the Buhari government is now seeking to recover.142

In Kenya, the Eurobond saga illustrates again the dangers of not depositing revenue raised in the Consolidated Fund. When the National Treasury floated a sovereign bond (Eurobond), the proceeds were, contrary to the Constitution, deposited in an off-shore account. It is as yet (p. 405) uncertain whether all the funds were paid into the Consolidated Fund and whether funds allegedly paid over to departments were received and spent, overall leaving KES215 billion unaccounted for.143

The rule is also voided when part of the executive is corporatized in order to operate on business principles, including turning a profit. The result in this case is that SOEs’ income does not form part of the consolidated revenue fund, only its dividends—if ever they are so declared. In South Africa, SOEs (Eskom and South African Airways in particular) have proven spectacularly inept at being self-sustaining, requiring massive bailouts each year from the national budget.

5.4  Limiting Parliament’s role in consolidated revenue fund withdrawals

A parliament’s control over expenditure through the budget is, in the first place, limited to what has been deposited in the consolidated fund. Off-budget funds readily escape parliamentary control.144 In South Africa a large slice of public funds is managed by SOEs, whose budgets are not part of the consolidated fund; Parliament therefore has no authority over the use of these funds. The exclusion of SOEs from the fiscal constitution has allowed for high levels of corruption. The main thrust of the Zuptas’ capture of the state was to gain control of key SOEs: the electricity utility Eskom, the arms manufacturing company Denel, and the railways company PRASA.145

The history of Kenya provides an extreme example of how an all-powerful executive weakened Parliament and ‘turned public budgeting into an endeavour of rewarding regions and personalities rather than serv[ing] the common good’.146 It was these abuses of public money, Lumumba and Franceschi argue, that prompted the public to support the 2010 Constitution, which enabled Parliament to wrest control of public finance from the executive;147 the Constitution’s financial provisions were ‘significantly influenced by the need to correct excesses and abuses, including misappropriation’.148

Subsequent parliamentary oversight over expenditure also depends on the structure and detail of the budget. If Parliament approves a large contingency fund which is to be used by the president at his or her discretion, it limits its oversight potential, while too small a contingency fund cannot deal with emergencies.149

5.5  A weak office of the Controller of Budget

In South Africa, in the absence of a constitutionally recognized office of the Controller of Budget, its function is performed by the Accountant-General, located in the National (p. 406) Treasury. The autonomous functioning of that office thus depends largely on the autonomy of the National Treasury when it comes to enforcing compliance with budget implementation.

Annually, the Auditor-General has reported high percentages of unauthorized spending at all three levels of government.150 Part of the explanation lies in the unbundling of the role of the Accountant-General. Departments receive their voted budgets with strict rules requiring expenditure within the budget’s parameters, yet these rules are not complied with, seeing as the departments, vested with full control of the budgets, regularly overspend with impunity.

At the municipal level, it is the chief executive officer, the municipal manager, who performs the function of seeing that expenditure falls within the adopted budget. As this requires that the chief executive office is self-controlling, expenditure overruns are alarmingly high.151

5.6  Undermining the value of the independent office of the Auditor-General

Although the Anglophone Auditor-General has no executive powers, it is an office with tremendous ‘nuisance value’ in exposing corruption. Its effectiveness is readily undermined, however, when it does not have enough financial, human, and material resources to conduct audits. It is found that very few auditors-general in Africa deliver their reports within six or twelve months after the end of the financial year;152 indeed, more often than not, no reports are tabled.

The functioning of the Nigerian Auditor-General illustrates these problems. An acting Auditor-General complained in 2003 about the lack of protection for auditors and whistle-blowers investigating corruption.153 Between 2007 and 2009, the Auditor-General had to clear the decks and produce reports for 2002 to 2007. The new Auditor-General of Nigeria said in 2016 that the last audit report made public was for the 2008 financial year, issued in 2009.154

As the Auditor-General noted laconically in 2006, ‘All over the world, public audit is the key fighter of corruption. The Office of the Auditor General for the Federation has yet to achieve this status in Nigeria.’155 Conversely, poor record-keeping, a weak parliament, and a ministry of finance unwilling to act upon the opinions expressed, renders the Auditor-General’s influence marginal.

In South Africa, the office of the Auditor-General has a proven track record of producing timely comprehensive audit reports on all government entities at the three levels of government as well as SOEs. It has been very effective in exposing unauthorized, irregular, and fruitless and wasteful expenditure, as well as corrupt practices. However, the efficacy of its (p. 407) watchdog role has been compromised by the failure of governments to implement its recommendations, and, more recently, by open hostility towards it.

In response to the first problem, the Auditor-General proposed amendments in 2017 to the Auditor-General Act that would enable the office to apply ‘remedial actions’ if its recommendations are not implemented. Such actions include imposing personal liability for those who cause financial loss, in this way nudging South Africa closer to the Francophone model.156 In 2018 Parliament approved the amendments, which are due to be signed into law. On the second score, given the extent of the corruption revealed, officials are becoming resistant to the prying eyes of the auditors and contesting audit outcomes.157 In a recent, extreme, case, the Auditor-General had to withdraw staff from the eThekwini Metropolitan Municipality when they received death threats.158

5.7  Capturing the national treasury

While the national treasuries of South Africa and Kenya have constitutional recognition but limited autonomy, the constitutional premise is nevertheless that they exercise their functions as managers of the state’s finances in a non-partisan and professional manner. Given their central role in expenditure (and procurement) decisions, they hold the keys to the state’s coffers. One such decision is the signing off by the Minister of Finance on major contracts, including those of SOEs. In South Africa, the capture of the National Treasury (and so, too, of SARS) was thus a major objective in the Zuptas’ intentions to loot the state. To that end, compliant officials, specifically a compliant Minister of Finance, were necessary.

In testimony before the Zondo Commission, the former Minister of Finance, Nhlanhla Nene, appointed by Zuma in May 2014, revealed that he refused to sign off on a trillion-rand transaction under the terms of which South Africa would buy nuclear power stations from Russia, saying the country could not afford it (the Guptas, on the other hand, would have profited from the deal as they obtained a uranium mine). Nene’s refusal led to his sacking in November 2015 and replacement by an unknown Member of Parliament, but Zupta acolyte, Des van Rooyen.159 The markets crashed and the value of the rand dropped sharply within a day, causing such an outcry within the business sector, and in the ANC itself, that Van Rooyen was replaced after three days in office by the only person who could calm the markets—the former Minister of Finance, Pravin Gordhan.

Yet that was only a temporary setback for the Zuptas: they immediately launched a campaign to undo his position. First, he was accused of creating, when he was Commissioner of Inland Revenue, an illegal intelligence unit, but the charge was proved baseless.160 Secondly, the National Prosecuting Authority served a summons on Gordhan, two days before he (p. 408) delivered his medium term budget speech, to stand trial for the ‘criminal act’ of approving the early retirement of a SARS official ten years prior to that. When this charge, too, was shown to be baseless in law and fact, the National Director of Public Prosecutions withdrew the charges on the proverbial steps of the courtroom as non-governmental organizations (NGOs) challenged the legality of the charges.161 Thirdly, and conclusively, President Zuma fired Gordhan in March 2017 on the basis of a fake intelligence report that he conspired with foreign interests to stage a regime change.162

The capture of the Treasury was complete when Zuma appointed Malusi Gigaba as Minister of Finance, the very same person who, as Minister of Public Enterprises, facilitated the Zupta capture of the SOEs, and, as Minister of Home Affairs, expedited the granting of South African citizenship to the Gupta family. After Zuma’s removal as president, Ramaphosa in his first cabinet reshuffle shifted Gigaba to another ministry and brought back Nene. The latter resigned as Minister in October 2018 when he revealed to the Zondo Commission that as Minister of Finance he, too, had held meetings with the Gupta brothers in their private residence.

5.8  Weak parliamentary oversight role of the executive

It is not an overstatement that African parliaments have failed systematically to perform their oversight role. Strong executive presidencies and hegemonic political parties have invariably cowed parliaments into subservience, and although armed with whatever information provided by reports from auditors-general and other independent bodies, parliaments have fulfilled their oversight role poorly. In many African countries, parliamentary committees do not have sufficient technical expertise to engage with the reports, or are unwilling to act upon them where there is little separation between the executive and the legislature.163

In South Africa, the parliamentary oversight role is performed in the main by the opposition parties; the African National Congress (ANC) majority has been mostly defensive when allegations and evidence of wrongdoing are directed at their party leadership. When the Public Protector, Thuli Madonsela, recommended that Zuma repay some of the ZAR240 million spent on a ‘security upgrade’ of his private estate, Nkandla,164 the ANC caucus first rubbished, then ignored, her report.165 It took a Constitutional Court directive for Parliament to spring into action with an inquiry.166

Kenya is illustrative of how Parliament can negate its oversight role by simply not considering the Auditor-General’s reports. It is said that in 2003, Parliament was five years in arrears in examining these reports, a period in which there had been gross abuse of public (p. 409) funds.167 A similar situation prevails in Nigeria. The Auditor-General reported in 2016 that the Public Accounts Committees

[have] rarely been able to submit their own reports to the plenary sessions of the National Assembly. In the same vein, the plenary sessions have failed to agree on any motion instructing the executive arm of government to implement the agreed audit recommendations.168

In relation to SOEs, the South African Parliament receives the Auditor-General’s annual audits and the SOEs’ annual reports, but the New Public Management paradigm, under the terms of which state services or activities are corporatized and set at arm’s length from the overseeing departments, has placed them beyond parliamentary accountability. Being accountable instead to boards of directors, they are once-removed from the direct control of ministers, who are merely the only or majority shareholder. This independence has also weakened parliamentary control and oversight over them.169 South Africa is again a prime example of how key state functions—electricity generation and rail transport—were corporatized, only to fall victim to the predations of the Zuptas and far from the scrutiny of Parliament.170

5.9  Attacking the independence of the central bank

Proclaiming the central bank’s independence in a constitution may be a necessary condition, but is certainly not a sufficient one for its autonomous decision-making: there is often a deep schism between the law and practice.171

South Africa is again illustrative of how the Reserve Bank of South Africa, the last of the independent financial governance institutions, became the next target for the Zuptas to capture.172 They had no problem with the Bank’s policy of price stability, but the supervisory role the Bank plays in regard to banking probity and the flow of money in and out of the country proved to be troublesome.173 The Bank has strong investigatory powers over money flows and the ability to seize assets,174 as well as the capacity to expose (as it has done) the Gupta’s money-laundering activities.175

In responding to a complaint that the Reserve Bank gave Absa Bank a bailout during the apartheid era which it had not repaid, the Public Protector, Busisiwe Mkhwebane, who succeeded Madonsela in September 2016,176 used the opportunity to attack the Reserve Bank’s (p. 410) independence. She proceeded, in an action unrelated to the complaint at hand, to instruct Parliament to amend the Constitution by removing, first, the object of protecting the value of the currency, and secondly, the independence of the institution.177 When the Reserve Bank took the findings on review, the Court set these instructions aside because they were ‘unconstitutional’, ‘irrational’, ‘unlawful’, and ‘procedurally unfair’.178

This was not a case of mere incompetence; it was, as a commentator put it, ‘calculated to undermine the authority of the Bank’.179 Indeed, it came to light that, shortly before releasing her report, the Public Protector had met with both the Presidency and State Security Agency to discuss the ‘vulnerabilities’ of the Bank.180 As a measure of disapproval of her conduct, the Court ordered that she pay 15 per cent of the trial costs from her own pocket.181

It is evident in Nigeria as well that the independence of central banks can be annoying to a predatory elite. President Goodluck Jonathan fired the Governor of the Central Bank, Lamido Sanusi, in 2014 for alleged acts of ‘financial recklessness and misconduct’—acts that were no more than a warning to the government that the national oil company had neglected to pay some USD20 billion into the Federal Account kept by the Central Bank.182

5.10  State capture

In this overview of how the Diceyan model of the ‘financial constitution’ works in practice in the countries under review, two trends stand out. First, the modern state has put the Diceyan model under strain. The state of a hundred years ago, comprising a single hierarchical institution under the control and scrutiny of Parliament, has transmogrified into a sprawling, fragmented behemoth. Under the banner of New Public Management, it has been splintered into an array of SOEs that provide essential services like roads, electricity, and postal services as well as run rather more commercial enterprises, such as airways, railways, and weapons manufacturing.

The principal aim of this was to place such entities at arm’s length from the executive so that they could give a better return (and service) to the state by operating on business principles rather than out of political considerations. In South Africa, however, SOEs have not so much turned a profit for the state as become cash cows for private interests, given that by being at arm’s length from the executive they are also in effect beyond the reach of accountability to Parliament.

The second major trend is that the constitutional institutions responsible for probity in public finance are themselves vulnerable to capture by political elites conniving with private (p. 411) interests. The ongoing Zondo and Nugent Commissions of Inquiry into state capture reveal the depth and breadth of the Zupta machinations in wresting control of almost every key institution of state and then destroying the functioning of these very bodies meant to protect the commonwealth from thievery. As the writer Jonny Steinberg astutely observes,

[Zuma] led a secret, organised, highly sophisticated campaign to permanently disable the public institutions that make the country work. It was not so much an attack on the bean counters as a project to smash the very machinery that counts beans. He wanted to preside over a country that would lack the equipment to keep basic accounts.183

Similar stories are heard in Nigeria and Kenya. Fortunately for South Africa, there were independent state institutions and social formations that could both resist state capture and bring about the Zuptas’ demise.

In the first place, key independent institutions remained immune from state capture. Thuli Madonsela courageously fulfilled the mandate of the Public Protector by investigating corruption and producing reports on the Nkandla saga and state capture. On the basis of these reports, as well as information and complaints by civil society and opposition political parties, the courts, unblemished in their integrity, could compel Zuma to repay what he gained from the Nkandla saga, reinstate the numerous fraud charges against him (dating from pre-2009), and make him face a motion of no confidence by secret vote in Parliament.184 Moreover, an active civil society, led by intrepid investigative journalists and NGOs, exposed the extent of the corruption, in the process galvanizing a national anti-corruption discourse that also fed into competitive politics within and between parties.

Thus it was that, come the ANC’s leadership elective conference in December 2017, the choice fell between Dr Nkosazana Dlamini-Zuma, the former wife of Zuma and representing the ANC faction aligned to him, and Cyril Ramaphosa, leading the anti-corruption campaign. In a political context where the ANC could lose the 2019 general elections (it garnered only 52 per cent of the vote in the 2016 local government election and lost three major metropolitan councils, principally because of the Zupta spectre), the ANC elected Ramaphosa as its new leader, though by a hair’s-breadth majority.185

A month later, Zuma had been jettisoned as the country’s President and the new administration under Ramaphosa commenced the task of liberating the state from its predatory elite. By all accounts, this will take years to accomplish.

6.  Conclusion

The Anglophone African countries under review have constitutionalized the central features of the classic British system of public finance management. In each country there is a separation of powers between the executive and legislature, with the latter having authority over the raising of taxes, the appropriation of these proceeds, and the oversight of their expenditure. The Controller of Budget has been constitutionalized only in Kenya, while an independent Auditor-General is standard fare; a central bank and independent commissions dealing with budget formation have been added to the financial constitutions. Furthermore, (p. 412) semi-independent institutions, such as revenue-collection agencies and national treasuries have been established by legislation.

The constitutionalization of this financial architecture both reflects and reinforces the basic elements of constitutionalism: the democratic control of resources, the limiting of powers, the rule of law, and the pursuit of development. If fully implemented, the end result would not necessarily be the elimination of corruption but at least its containment. Yet corruption is rampant. Why, and what can be done about it?

The ‘financial constitutions’ fail to contain predatory elites for two reasons. The first is that, as argued above, the framework has not yet been adapted institutionally to suit a state under the spell of the New Public Management and with public entities operating at arm’s length from the executive and thus doubly so from the democratic controls of Parliament. Secondly, even if institutional refinements take place, the organs of public finance are always vulnerable to capture by predatory elites; once captured, their inbuilt constitutional safeguards are hollowed out and they themselves become the vehicles for looting.

Given this state of affairs, how can public resources be wrested back from private and political interests and devoted to the public good? The battle against corruption is part of the fight for constitutionalism—indeed, perhaps even the most important part. But how is the battle to be fought? What are the strategies? It is easy to say, as the African Development Bank and World Bank do, that ‘combating corruption requires strengthening governance and promoting integrity, in particular in the area of public financial management’.186 Yet how is this done? Taking a leaf from the South African book, two strategies have been suggested: the first is to strengthen the constitutional institutions responsible for preventing and combating corruption, and the other is developing the political will to combat corruption.

The first strategy—bolstering the legal edifice, seeing where there are gaps—faces both theoretical and practical problems. Further constitutionalizing public finance management is likely to mean placing increasing faith in independent institutions to save the day and deliver states from corruption. The focus would be on chipping away at executive powers by, for example, making SARAs fully autonomous, institutionalizing the Controller of Budget as a constitutional figure, making civil service appointments only by independent public service commissions and doing likewise with procurement decisions, and giving the Auditor-General executive powers.

This strategy is a vote of no confidence in constitutional democracy. It implies distrust of the public’s ability to elect honest representatives and of the ability of these representatives to hold the executive accountable. The strategy also raises the question of the checks and balances applicable to unelected bodies (which they remain even when jointly appointed by the executive and Parliament), a system of safeguards that has not yet fully been developed. Here, it should be noted that the hybrid institutions are different from the judiciary, which performs the clearly defined constitutional role of rule interpretation and application. The independent bodies, when making executive decisions, have more leeway than courts and the accountability mechanisms in this regard are still poorly developed. However meticulous their constitutional crafting, independent institutions are themselves susceptible to elite capture.

The second, more important, strategy is to close the gap between the legal framework and practice by cultivating the required political will. Central to the Diceyan financial constitution is democracy and accountability—Parliament, in short. The election of legislatures and (p. 413) executives still lie at the core of democratic systems. The question, then, is: How can this system produce honest MPs and presidents?

In a multiparty democracy the answer lies in competitive politics. However, unless political choices are made on the basis of good-governance values, and not on ethnic or other partisan considerations, the political will to fight corruption will be absent. Competitive politics does not mean only the replacement of one party by another at the polls; it could (or should) also entail that a ruling party rotten to the core has to clean up its act, if only to prevent its slide into unpopularity and eventual defeat at the polls (assuming the polls are not subject to the corrupt practices of rigging).

Political parties, in turn, are (or should be) responsive to widespread anti-corruption sentiments. For those to be fostered and grown, civil society plays a crucial role. The exposure of corruption by an independent media and active civil society is vital, particularly insofar as it shows how state corruption directly and devastatingly prejudices ordinary people, especially the poor. Informed citizens, sensitized to the corrosive effect of corruption, hold the key to ensuring that their hard-earned taxes are indeed spent to their benefit.

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Footnotes:

1  The valuable research assistance of Henry Paul Gichana is gratefully acknowledged. The helpful comments of the anonymous reviewers are also appreciated.

2  AV Dicey, Introduction to the Study of the Law of the Constitution (8th edn 1915, Liberty Classics 1988).

3  Dicey (n 2) 202.

4  ibid 203.

5  ibid 205.

6  ibid.

7  ibid 206.

8  ibid 208.

9  ibid 208.

10  ibid 208.

11  South African Constitution, s 215(1).

12  ibid s 77(1).

13  ibid s 77(3).

14  See Money Bills Amendment Procedure and Related Matters Act 9 of 2009.

15  Fedsure Life Assurance Ltd and Others v Greater Johannesburg Transitional Metropolitan Council and Others 1998 (12) BLCR 1458 (CC) (Fedsure) [44]. See also Ross Kriel and Mona Monadjem, ‘Public Finance’ in Stuart Woolman and others (eds), Constitutional Law of South Africa (2nd edn, Juta 2014) vol 2, 23–27.

16  Fedsure [44].

17  See Nigerian Constitution, art 59 read with sch 2, pt 1.

18  Kenyan Constitution, art 210(1).

19  ibid art 260 ‘legislation’.

20  See Arthur Mann, ‘Are Semi-Autonomous Revenue Authorities the Answer to Tax Administration Problems in Developing Countries? A Practical Guide’ (2004) Annex 5 <http://pdf.usaid.gov/pdf_docs/Pnadc978.pdf> accessed 10 September 2017.

21  Mann (n 20) 1. See also William Crandall, Revenue Administration: Autonomy in Tax Administration and Revenue Authority Model (IMF 2010) 6.

22  Mann (n 20) 43.

23  Kenyan Constitution, art 210(2).

24  ibid art 210(3). In Timothy Njoya & 17 Others V Attorney General & 4 Others [2013] eKLR, the court said that the purpose of this provision is to ensure that everyone, including MPs, paid taxes.

25  Kenyan Constitution, art 251.

26  South African Revenue Service Act 34 of 1997, s 2.

27  South African Revenue Service Act, 1997, s 6 (as amended by the South African Revenue Service Amendment Act 2002).

28  Revenue Authority Act, 1995, s 3(3).

29  ibid s 11.

30  South African Constitution, s 213(1).

31  Nigerian Constitution, art 80(1).

32  ibid art 162(1).

33  ibid art 80(1).

34  ibid art 162(3).

35  Kenyan Constitution, s 206(1).

36  Fedsure (n 15) [44].

37  ibid [45].

38  South African Constitution, s 213(2).

39  Nigerian Constitution, art 80(2).

40  ibid art 80(3).

41  Kenyan Constitution, art 206(2). In the case of Parliament not passing an Appropriations Act, by resolution it may vote for interim measures until such time the Act is passed (arts 222–23).

42  South African Constitution, ss 230 and 230A.

43  Kenyan Constitution, art 204(1). See also John Mutakha Kangu, Constitutional Law of Kenya on Devolution (Strathmore University Press 2016) 275.

44  South African Constitution, s 219(2), effected by the Independent Commission for the Remuneration of Public Office Bearers Act 92 of 1997.

45  Nigerian Constitution, heading of s B, pt 1, in ch 6, dealing with the Federal Executive.

46  ibid art 84(1) and (4).

47  Kenyan Constitution, art 230.

48  South African Constitution, ss 214(1) and 220(1).

49  Nigerian Constitution, arts 160(2) and 162(2).

50  Kenyan Constitution, art 218(2)(c). See also Mutakha Kangu (n 43) 259 et seq.

51  Kenyan Constitution, arts 215, 216, and 219.

52  Kenyan Constitution, 1969, art 105(5).

53  Kenyan Constitution, art 228(2).

54  ibid art 206(4).

55  ibid art 228(6).

56  ibid art 226(5).

57  Public Finance Management Act 1 of 1999.

58  South African Constitution, s 196.

59  Nigerian Constitution, art 158(1).

60  ibid art 171. In addition, there is the Federal Character Commission, which is responsible for giving effect to the principle of the ‘federal character’ by devising a formula for the equitable distribution among the states and ethnic communities of all political positions and posts in the civil service, army, police force, state enterprises and parastatals, and the like (Nigerian Constitution, arts 14(3) and (4), 153(1)(a), and Third Schedule pt 1C.

61  Kenyan Constitution, art 233(3) and (4).

62  ibid art 234(2). There a number of exceptions to the general rule (art 234(3)).

63  ibid art 237.

64  Ezequel Nino, Access to Public Information and Citizen Participation in Supreme Audit Institutions (SAI): A Guide to Good Practices (World Bank Institute, 2010) 4; World Bank, Features and Functions of Supreme Audit Institutions. Findings Report 2002 (World Bank 2002) 1.

65  See African Development Bank and World Bank (ADB and WB), Strengthening Country External Auditing Systems in Africa: A Joint Strategy of the Africa Development Bank and the World Bank (ADB and WB 2010) Annexure 4, 24; World Bank (n 64) 4.

66  See ADB and WB (n 65) 23; World Bank (n 64) 1.

67  World Bank (n 64) 3.

68  ADB and WB (n 65) 4.

69  See International Standards of Supreme Audit Institutions, Lima Declaration of 1977, ss 5–7; ADB and WB (n 65) 3.

70  South African Constitution, s 181(1).

71  In the first draft of the 1996 Constitution, the Auditor-General was to be appointed, and could be removed, by a simple majority in the National Assembly. The Constitutional Court in reviewing the draft found that the appointment and dismissal procedure did not provide the necessary independence as required by the interim Constitution’s constitutional principles (Certification of the Constitution of the Republic of South Africa, 1996 1996 (10) BCLR 1253 (CC)). The amended text, which provided for greater protection—a supporting vote of 60 per cent in the National Assembly for an appointment and a two-thirds majority for a dismissal—was approved by the Court (Certification of the Amended Text of the Constitution of the Republic of South Africa, 1996 1997 (1) BCLR 1 (CC)).

72  South African Constitution, s 188.

73  In accordance with the Public Audit Act 25 of 2004.

74  Stuart Woolman and Yolandi Schutte, ‘Auditor-General’, ch 24B, in Stuart Woolman and others (eds), Constitutional Law of South Africa (2nd edn, Juta 2014) vol 2, 24B–11.

75  ibid 24B–3.

76  Nigerian Constitution, art 85(1) and (2).

77  ibid art 85(3).

78  ibid art 85(6): the Auditor-General ‘shall not be subject to the direction or control of any other authority or person’.

79  ibid art 86(1).

80  ibid art 87(1).

81  ibid, art 229(1) and (3).

82  ibid arts 229 and 251(1). The grounds are (a) serious violation of the Constitution or any other law; (b) gross misconduct; (c) physical or mental incapacity; (d) incompetence; or (e) bankruptcy.

83  ibid, art 251(6).

84  Kenyan Constitution, art 229(6).

85  ibid art 229(8).

86  South African Constitution, s 216(1).

87  ibid, s 216(2).

88  See CM Fombad, ‘An Overview of Separation of Powers under Modern African Constitutions’ in CM Fombad (ed), Separation of Powers in African Constitutionalism (OUP 2016) 70–73.

89  South African Constitution, s 55(2).

90  Nigerian Constitution, art 88(1) and (2).

91  Kenyan Constitution, art 211(2).

92  Nino (n 64) 1.

93  Nergiz Dincer and Barry Eichengreen, ‘Central Bank Transparency and Independence: Updates and New Measures’ (2013) 6, WP 2013-21 <https://ssrn.com/abstract=2579544> accessed 10 September 2017; Manfred JM Neumann, ‘Precommitment by Central Bank Independence’ (1991) 2 Open Economies Review 95; Christopher Crowe and Ellen E Meade, ‘The Evolution of Central Bank Governance around the World’ (2007) 24(4) Journal of Economic Perspectives 69, 70.

94  Alex Cukierman, ‘Central Bank Independence and Monetary Control’ (1994) 104 The Economic Journal 1437, 1437.

95  ibid 1440. See also the Governor of the Reserve Bank of South Africa, quoted in Reserve Bank of South Africa and Others v Public Protector and Others [2017] ZAGPPHC 443 (15 August 2017) [47].

96  South African Constitution, ss 223 and 224(1).

97  ibid, s 224(2): the Reserve Bank, ‘in pursuit of its primary object, must perform its functions independently and without fear, favour of prejudice’.

98  ibid, s 224(2).

99  South African Reserve Bank Act 1989, as amended by Act 2 of 1996, s 4(1)(a). The Board of the Bank comprises fourteen members, seven of whom are appointed by the President and the rest by the Bank’s shareholders.

100  Reserve Bank of South Africa v Public Protector (n 95) [27].

101  Kenyan Constitution, s 231(3): ‘The Central Bank of Kenya shall not be under the direction or control of any person or authority in the exercise of its powers or in the performance of its functions.’

102  ibid, s 231(4).

103  Central Bank of Kenya Act, s 11(2).

104  ibid, s 13.

105  Central Bank of Nigeria Act 2007, s 1(3).

106  ibid, s 2(a).

107  ibid, s 8(1)–(2).

108  ibid, s 11(2)(d).

109  See CM Fombad, ‘Challenges to Constitutionalism and Constitutional Rights in Africa and the Enabling Role of Political Parties: Lessons and Perspectives from Southern Africa’ (2007) 55(1) American Journal of Comparative Law 1; CM Fombad, ‘Constitutional Reforms and Constitutionalism in Africa: Reflections on Some Current Challenges and Future Prospects’ (2011) 59 Buffalo Law Review 1007.

110  CM Fombad, ‘The Role of Emerging Hybrid Institutions of Accountability in the Separation Scheme in Africa’ in CM Fombad (ed), Separation of Powers in African Constitutionalism (OUP 2016) 325.

111  Nico Steytler, ‘The Relationship between Decentralisation and Constitutionalism in Africa: Concepts, Conflicts and Hypotheses’ in CM Fombad and N Steytler (eds), Decentralisation and Constitutionalism in Africa (OUP 2019).

112  ibid.

113  Yash Ghai, ‘Constitutionalism: African Perspectives’ in Patricia Kameri-Mbote and Collins Odote (eds), The Gallant Academic: Essay in Honour of HWO Okoth-Ogendo (University of Nairobi 2017) 149.

114  Fedsure (n 15) [45].

115  See Allan Drazen ‘Central Bank Independence, Democracy and Dollarization’ (2002) 5 Journal of Applied Economics 1.

116  ibid 5. Goodhart argues that independent central banks are in the same position as the judiciary: while Parliament has goal independence (legislation), the courts have operational independence (that is, interpreting and applying the legislation). By analogy, the executive may set the inflation targets, but the central bank must be left to achieve that goal. See CAE Goodhart, ‘The Constitutional Position of an Independent Central Bank’ (2002) 37(2) Government and Opposition: An International Journal of Comparative Politics 190.

117  Regarding concerns about the unaccountability of central banks, see Jon Elster, ‘Constitutional Courts and Central Banks: Suicide Prevention or Suicide Pact?’ (1994) 3 East European Constitutional Review 66.

118  Dincer and Eichengreen (n 93) 36; Goodhart (n 116) 201.

119  Fombad (n 110) 326.

120  ibid 330.

121  Dicey (n 2) 202. Emphasis added.

122  ibid 208.

123  Transparency International, ‘Corruption Perception Index 2017’ (Transparency International, 21 February 2018) <http://www.transparency.org/news/feature/corruption_perceptions_index_2017> accessed 9 October 2018.

124  ADB and WB (n 65) 1.

125  Fombad (n 110).

126  On state capture, see Haroon Bhorat and others, ‘The Betrayal of a Promise: How South Africa is Being Stolen’ (Public Affairs Research Institute 2017) <http://pari.org.za/betrayal-promise-report/> accessed 8 August 2017.

127  The product of a number of enterprising investigative journalists, these culminated in notable books by: Jacques Pauw, The President’s Keepers: Those Keeping Zuma in Power and out of Prison (Tafelberg 2017)) and Adriaan Basson and Pieter du Toit, Enemy of the People: How Jacob Zuma Stole South Africa and How the People Fought Back (Jonathan Ball 2017). See also the summary by Robin Renwick, How to Steal a Country: State Capture and Hopes for the Future of South Africa (Jacana 2018).

128  Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector, Proc 3 of 2018.

129  Sikonathi Mantshantsha, ‘Eskom Gives Guptas 75% Discount on R2.1bn Fine Levied on Glencore’ Business Day (Johannesburg, 23 June 2017) <https://bit.ly/2FgycV0> accessed 15 September 2017. See also Anton Eberhard and Catrina Godinbo, The Eskom Inquiry Reference Book (UCT Graduate School of Business 2017) <https://bit.ly/2iivILC> accessed 28 November 2017.

130  Mann (n 20).

131  Mann (n 20) 2. Crandall (n 21, 10) argues that whatever model is chosen, the political commitment to an effective revenue authority is of the utmost importance.

132  Mann (n 20) 49.

133  Commission of Inquiry into Tax Administration and Governance in the South African Revenue Service (SARS), chaired by retired Supreme Court of Appeal Judge Robert Nugent, 23 May 2018.

134  See Section 5.7 below for the capture of the National Treasury.

135  See Marian Thamm, ‘Analysis: Moyane, the Gupta R70-Million Windfall and the Trouble with SARS’ (Daily Maverick, 3 June 2017 <https://bit.ly/2TFS0EN> accessed 12 September 2017.

136  Ra’eesa Pather, ‘Shaun Abrahams Drops Charges against Gordhan, Pillay and Magashula’ Mail & Guardian (Johannesburg, 31 October 2016) <https://bit.ly/2Feys7a> accessed 10 April 2017.

137  ‘#GuptaLeaks: Questions Surround Guptas’ Minimal Tax Returns’ (Amabhugane, 23 August 2017) <http://amabhungane.co.za/article/2017-08-23-guptaleaks-questions-surround-guptas-minimal-tax-returns> accessed 12 September 2017.

138  Thamm (n 135).

139  Pauw (n 127).

140  Office of the Auditor-General, Report of the Auditor-General on the Financial Statements for the National Government for the Year 2014/2015 (Republic of Kenya 2016) 8 <https://bit.ly/2TBUow5> accessed 7 September 2017.

141  Global Witness, Shell and ENI’s Misadventures in Nigeria (Global Witness 2015) 7 <http://www.globalwitness.org/documents/18122/Shells_misadventures_in_Nigeria.pdf> accessed 7 September 2017

142  See also the dismissal in 2014 of the Governor of the Central Bank of Nigeria, Lamido Sanusi, when he disclosed that USD20 billion was not deposited in the Consolidated Revenue fund.

143  Office of the Auditor-General (n 140) 4. See also Paul Wafula, ‘Audit: Sh 215b Eurobond Case Unaccounted for’ The Standard Digital (Nairobi, 7 September 2016) <http://www.standardmedia.co.ke/article/2000215138/audit-sh215b-eurobond-cash-unaccounted-for> accessed 7 September 2017.

144  Ian Lienert, Role of Legislatures in Budget Processes (IMF 2010) 10.

145  Bhorat and others (n 126).

146  P, LO Lumumba and Luis Franceschi, The Constitution of Kenya: An Introductory Commentary (Strathmore University Press 2010) 552.

147  ibid.

148  ibid 553.

149  Lienert (n 144) 10.

150  See most recently, Auditor-General South Africa, PMFA 2016–2017: Consolidated General Report on National and Provincial Audit Outcomes (Auditor-General South Africa 2017) <https://bit.ly/2VCnwoN> accessed 7 September 2017.

151  Auditor-General South Africa, MFMA 2016/17: Consolidated General Report on the Local Government Audit Outcomes (Auditor-General South Africa 2018) <https://bit.ly/2GLuq2d> accessed 1 September 2018.

152  ADB and WB (n 65) 2.

153  Auditor-General of the Federation, ‘Introduction and History’ (Auditor-General of the Federation, May 2016) <https://bit.ly/2RhqiBv> accessed 8 September 2017.

154  ibid 21.

155  ibid 36.

156  Liesl Peyper, ‘AG Eyes Stricter Penalties for Offenders of Supply Chain Regulations’ News24 (Cape Town, 25 August 2017) <https://bit.ly/2CWDu5M> accessed 10 September 2017.

157  Auditor-General South Africa, Spotlight on Accountability: Integrated Annual Report 2017–2018 (Auditor-General South Africa, 2018) 13.

158  Mxolisi Mngadi, ‘KZN Auditor-General Halts eThekwini Metro Audit Following “Death Threats”, Recalls All Staff’ News24 (Cape Town, 25 May 2018) <https://bit.ly/2LYW2Fw> accessed 11 October 2018.

159  Before Van Rooyen’s appointment, the then Deputy Minister of Finance, Mcebisi Jonas, was offered the position by the Guptas as well as a ZAR600-million bribe on the promise that four key National Treasury officials be sacked (Jonas’s testimony before the Zondo Commission, 24 August 2018).

160  The accusations against Gordhan were based on a forensic report by the international auditing firm KPMG, which the latter retracted in September 2017, stating that the report did not comply with appropriate auditing standards. See Pieter Du Toit, ‘KPMG Shocker: Audit Firm Disavows SARS “Rogue Unit” Report, Eight Senior Staff Resign’ <https://bit.ly/2LY2VqF> accessed 28 September 2017.

161  Pather (n 136).

162  In President of the Republic of South Africa v Democratic Alliance and Others [2018] ZASCA 79 (31 May 2018) the Supreme Court of Appeal upheld a High Court ruling that Zuma had to reveal his reasons for dismissing Gordhan. At the time of writing, the matter is before the Constitutional Court.

163  ADB and WB (n 65).

164  Public Protector of South Africa, Secure in Comfort: Report on an Investigation into Allegations of Impropriety and Unethical Conduct Relating to the Installation and Implementation of Security Measures by the Department of Public Works at and in Respect of the Private Residence of President Jacob Zuma at Nkandla in the Kwazulu-Natal Province (2014) Report 25 of 2013/14 <https://bit.ly/2LW57ir> accessed 21 April 2018.

165  See Fombad (n 110) 332.

166  Economic Freedom Fighters v Speaker of the National Assembly and Others; Democratic Alliance v Speaker of the National Assembly and Others [2016] ZACC 11 (CC).

167  Lumumba and Franceschi (n 146) 552.

168  Auditor-General of the Federation (n 153) 6–7.

169  Raul Posner and Chung-Keun Park, ‘Role of the Legislature in the Budget Process: Recent Trends and Innovations’ (2007) 7(3) OECD Journal on Budgeting 1, 23.

170  See Bhorat and others (n 126); Basson and Du Toit (n 127).

171  See Cukierman (n 94) 1441.

172  Stephen Grootes, ‘Analysis: Public Protector’s Strange Absa Report, and Disturbing Attack on Reserve Bank’ (Daily Maverick, 19 June 2017) <https://bit.ly/2RGVF7G> accessed 30 June 2017.

173  See Ryk van Niekerk and Warren Thompson, ‘FIC Fines Bank of Baroda for Flouting Anti-Corruption Laws’ (Moneyweb, 4 September 2017) <https://bit.ly/2CVUZTJ> accessed 4 September 2017.

174  See Stuart Theobald, ‘Lest We Forget Reserve Bank’s Heroic Stand against Encroachment of Gupta Empire’ Business Day (Johannesburg, 11 September 2017) <https://bit.ly/2Fhtg1y> accessed 18 September 2017.

175  ibid.

176  After the most independent and effective Madonsela, Parliament’s choice of successor, Mkhwebane, was a safe bet for the majority party, having had a background in working for the National Intelligence Agency. See ‘Profile: Advocate Busisiwe Mkhwebane’ SABC (Johannesburg, 24 August 2016) <https://bit.ly/2FfB18T> accessed 17 April 2017.

177  Public Protector of South Africa, Alleged Failure to Recover Misappropriated Funds: Report on an Investigation into Allegations of Maladministration, Corruption, Misappropriation of Public Funds and Failure by the South African Government to Implement the Ciex Report and to Recover Public Funds from Absa Bank (2018) Report 8 of 2017/2018, para 5.3.25.

178  Reserve Bank of South Africa and Others v Public Protector and Others [2017] ZAGPPHC 443 (15 August 2017) [43]. The entire report was also set aside in a subsequent case brought by Absa Bank, the Reserve Bank, the Minister of Finance, and the National Treasury (Absa Bank Limited and Others v Public Protector and Others [2018] ZAGPPHC 2 (16 February 2018)).

179  Stuart Theobald, ‘Reserve Bank’s Powers Trouble the Guptas’ Business Day (Johannesburg, 3 July 2017) 7.

180  Moyagabo Maake, ‘Mkhwebane Discussed Bank’s “Vulnerabilities” with Presidency’ Business Day (Johannesburg, 13 September 2017) 1.

181  Absa Bank Limited and Others v Public Protector and Others (n 178).

182  Adam Nossiter, ‘Governor of Nigeria’s Central Bank is Fired after Warning of Missing Millions’ New York Times (New York, 20 February 2014) <https://nyti.ms/2VwDeSi> accessed 15 September 2014. See also William Wallis, ‘Nigeria’s Central Bank and State Clash over “Missing Billions” ’ Financial Times (London, 4 May 2014) <http://www.ft.com/content/57d43418-bb14-11e3-948c-00144feabdc0> accessed 7 September 2017.

183  ‘ANC’s Bruised Apples and Those Rotten to the Core’ Business Day (Johannesburg, 12 October 2018) 7.

184  See Basson and Du Toit (n 127) 197–209.

185  See Renwick (n 127) 199–209.

186  ADB and WB (n 65) 1.