Corruption charges halt two South Africa tech contracts

Irregularities found in bid evaluation process

South Africa, Africa's second largest telecommunications market, has become the latest country on the continent to deal with corruption charges regarding technology contracts, moving to cancel deals valued at more than US$552 million.

The Department of Home Affairs has cancelled a contract worth about 4 billion South African rand ($532 million), awarded to GijimaAst almost two years ago and meant to implement technology to track citizens from birth to death. The technology was supposed to work with an automated fingerprint identification system.

The country's Department of Trade and Industry has also cancelled a supply contract, valued at about 153 million South African rand ($20 million) that was awarded to Valor IT for the supply of an electronic content management system for the Companies and Intellectual Properties Registration Office (Cipro). The government agency issued allegations of irregularities in the bidding process and awarding of the contract.

In the face of widespread charges of corruption in bidding for government projects, South African Finance Minister Pravin Gordhan last year launched a project to tackle irregularities in the government's supply chain.

"South African government should not only cancel the contracts but should also prosecute those involved in the scandal in order to deter the reoccurrence of irregular tender process in future," said Amos Makanya, assistance communications officer at the Southern Africa Communication Agency.

Throughout Africa, government and industry insiders say that corruption has manifested itself in inflated costs for big infrastructure projects, mainly funded by loans from the World Bank.

In Nigeria, Africa's largest telecom market, the government is trying to root out corruption in supply contracts for the country's telecom market. Nigerian government officials are alleged to have received more than $21 million in bribes by Siemens officials for supply contracts. Siemens officials have already been slapped by a fine in Germany while former Nigerian government officials are still being investigated by the Nigerian Economic and Financial Crimes Commission (EFCC) over bribery charges.

Like the Nigerian government, the South African government invests millions of dollars in information technology development each year. However, the cancellation of the two contracts by South Africa has put the spotlight on corporate governance in the country.

The cancellation of the contracts was sparked by the Auditor General's investigations, which revealed a number of irregularities in procurement processes. The report by the Auditor General said Sita (State Information Technology Agency), a state IT agency responsible for most government computer procurement, had failed to check on the viability of Cipro as a business prior to the contract award.

The report further revealed that Sita had broken public procurement rules when it failed to show proper evaluation of Valor IT's financial status before the company was placed on an approved suppliers list. Inaccuracies were also noted on calculations on the scoring sheets completed by Sita's bid evaluation committee.

The cancellation of the two contracts brings to three the number of supply contracts that have been cancelled by the South African government in less than two years. Last year, a $896 million electronic payment system was cancelled due to flawed tender procedures.

One of the major criticisms leveled against African governments is lack of appropriate laws against corrupt companies, and in some cases, lack of effective implementation of the laws. In Kenya, the government hopes to save more than $680 million annually by implementing electronic solutions that will help prevent corruption by government officials.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags legalCriminalGijimaAstValor IT

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Malakata

Show Comments


James Cook University - Master of Data Science Online Course

Learn more >


Sansai 6-Outlet Power Board + 4-Port USB Charging Station

Learn more >



Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?