Mark Mobius, a veteran emerging-markets investor and co-founder of Mobius Capital Partners, said South Africa’s attempts to tackle corruption that’s stalled its economy for almost a decade are encouraging.
About R500 billion ($ 31 billion) was stolen from the state during the nine-year reign of former President Jacob Zuma, who was forced to resign in 2018, according to government estimates. Few legislative decisions were made and the ability of state organs, including the national prosecutor, to fulfill their functions was compromised by political appointments and the departure of competent staff.
Since replacing Zuma, President Cyril Ramaphosa has appointed new boards to government-owned companies and has tried to repair the state prosecutorial service. The findings of a judicial inquiry into the corruption have been made public and Ramaphosa is deliberating on what action to take on them.
“The fact that they have been addressing the corruption situation is quite amazing in some ways because the rule of law still has some meaning in South Africa,” Mobius said in an interview on Friday. This “is not the case in some other countries, not only in Africa, but in other parts of the world,” he said.
Mobius, 85, began running one of the world’s first emerging markets funds in 1987 for Franklin Templeton Investment Funds and spent more than 20 years with that company before founding his own firm in 2018. He is credited with investing in Africa before many other fund managers were willing to.
His views contrast with local criticism of Ramaphosa over the slow pace of prosecutions. While both Zuma and Ace Magashule – who has been suspended as secretary general of the governing African National Congress – are facing fraud trials, no senior political figures have been convicted. Zuma and Magashule deny any wrongdoing.
Stamping out corruption will allow the country to resolve its other problems such as an electricity-supply crisis, which Mobius said would be best fixed by putting both the generation and transmission industries into private hands.
“This idea that you’ve got to go after corruption – and people are at least thinking about it and worrying about it – is a very, very good sign,” he said. “South Africa, I think, is one step ahead in that sense, the rule of law.”
© 2022 Bloomberg