South Africa Starts Post-Zuma Graft Crackdown With Arrest of Former Minister

Paul Vecchiatto and Antony Sguazzin

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South Africa’s police have finally acted on President Cyril Ramaphosa’s pledge to end the corruption that’s stalled growth in Africa’s biggest economy almost two years into his rule.

Former State Security Minister Bongani Bongo was arrested in a case related to bribery and state-owned companies. Bongo appeared in a court in Cape Town Thursday to face a charge of corruption.

“This is the first big arrest,” said Claude Baissac, the head of Eunomix Business and Economics Ltd., which advises on political risk. “It’s demonstrating that at long last some criminal charges are going to be brought against African National Congress members and clearly pretty senior ones.”

More than 500 billion rand ($34 billion) was stolen from state companies and government departments during the nine-year rule of President Jacob Zuma, according to Ramaphosa. While he has promised to fix the economy by curbing state costs and splitting up the indebted state power utility, a demand for arrests has been a constant refrain in the nation’s media and on radio talks shows.

A judicial panel on graft during the Zuma era, headed by Deputy Justice Raymond Zondo, has seen evidence of widespread government graft televised daily for months. Bongo was a close ally of Zuma’s.

In addition to Bongo, the Hawks, a specialist police unit, arrested the chief executive officer of Cooperative Governance and Traditional Affairs, which oversees municipalities. Several other people were also arrested.

Bongo’s “detention is a welcome sign to investors concerned about the plight of governance in South Africa,” said Indigo Ellis, head of Africa research at Verisk Maplecroft, adding that his career has been mired in controversy. “He is low-hanging fruit in a deep-seated culture of corruption.”

Bongo was freed on bail and his case was postponed until Jan. 31, the National Prosecuting Authority said in an emailed statement. Calls to his phone seeking comment weren’t answered.

--With assistance from Mike Cohen.

To contact the reporters on this story: Paul Vecchiatto in Cape Town at pvecchiatto@bloomberg.net;Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net

To contact the editors responsible for this story: Gordon Bell at gbell16@bloomberg.net, Paul Richardson

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