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Are digital technologies fighting corruption or fuelling it?

Why South Africa’s governance environment holds the key to digital anti-corruption technologies.
Rennie Naidoo
By Rennie Naidoo, Professor in Information Systems (IS) at the Wits School of Business Sciences.
Johannesburg, 12 Nov 2024
Rennie Naidoo, professor in Information Systems at the Wits School of Business Sciences.
Rennie Naidoo, professor in Information Systems at the Wits School of Business Sciences.

Digital transformation is often heralded as a powerful tool in the fight against corruption, with governments worldwide integrating technology into their anti-corruption strategies.

In South Africa, a country deeply affected by corruption, digital technologies offer both promise and peril. The effectiveness of digital technologies depends largely on the strength and integrity of the governance environment.

Digital technologies can promote transparency by reducing human intervention in government processes. South Africa’s e-government portal and online tendering systems aim to streamline public procurement and help limit opportunities for bribery.

These technologies can enhance oversight by tracking financial transactions, exposing irregularities and ensuring public access to government contracts.

The Public Procurement Bill aims to increase transparency in public spending through the use of technology. However, digital technologies are no cure-all. Their effectiveness is contingent on the governance environment in which they are deployed.

In countries with strong rule-based systems, digital technologies bolster transparency. But in weaker governance environments, such as South Africa, corrupt actors can co-opt digital technologies, potentially worsening the problem.

Understanding the impact of digital technologies requires distinguishing between rule-based and clan-based systems.

Rule-based governance is defined by strong institutions and accountability, allowing digital tools to reinforce transparency. In these contexts, e-governance systems can provide real-time oversight of government activities, significantly reducing the scope for corruption.

E-governance systems can provide real-time oversight of government activities, significantly reducing the scope for corruption.

Clan-based systems, however, are marked by weak institutions, opacity and decision-making driven by personal relationships or kinship networks. Power is often concentrated within specific groups, leading to nepotism, favouritism and a lack of accountability.

While digital technologies can disrupt these practices, they can also be manipulated by corrupt actors. Digital systems may enable corruption, allowing illicit activities to occur behind the veil of automation or digital anonymity.

In South Africa, the roots of clan-based governance can be traced back to the colonial and apartheid eras, which institutionalised divisions, fostered patronage networks and excluded large sections of the population from governance and economic participation.

Although formal governance structures existed, they often operated through exclusive networks prioritising loyalty and control among a limited elite. In the post-apartheid era, state capture and cadre deployment have deepened elements of clan-based governance, complicating efforts to fight corruption.

Governance crossroad

South Africa sits in a grey area between rule-based and clan-based governance. It boasts a robust legal framework but struggles with political interference, weak enforcement and institutional decay.

The country’s experience with state capture exposed the fragility of institutions like the National Prosecuting Authority (NPA) and the South African Revenue Service (SARS), both weakened by corruption.

Despite this, there are promising examples of digital technologies being used to combat corruption. SARS has implemented advanced digital technologies to track financial fraud and enforce tax compliance. The Department of Home Affairs’ e-visa system aims to limit human interaction and bribery by digitising visa applications.

However, these advancements are not immune to manipulation. A highly-publicised case involving a student who spent millions of rands from an erroneous National Student Financial Aid Scheme payment highlights fundamental oversight gaps.

In this case, poor competency in system design, inadequate end-user testing and weak auditing processes allowed the error to go undetected. Digital systems can be as prone to abuse as manual processes without proper safeguards.

The dark side

In fragile governance environments, digital technologies can be weaponised for corrupt ends. The Zondo Commission’s report on state capture revealed how digital systems were manipulated to obscure corrupt dealings, including procurement processes and illicit financial transactions.

Moreover, cyber crime is on the rise in South Africa, with data breaches and unauthorised access to government systems becoming increasingly common. In this context, digital platforms and encrypted communication channels offer corrupt actors new, harder-to-detect avenues for illicit activities.

Crypto-currencies pose additional challenges, enabling untraceable transactions that complicate anti-corruption and money-laundering efforts. Weak enforcement and oversight allow these technologies to be exploited, turning digital transformation into a tool for corruption rather than a solution.

Rule-based transition

For digital technologies to be truly effective in fighting corruption, South Africa must not only strengthen its governance institutions but also ensure these systems are managed by skilled individuals with integrity.

Reinforcing institutions like the judiciary, the NPA and investigative bodies like the Hawks are critical to supporting digital platforms with effective enforcement mechanisms.

Even the most advanced technologies will fail if not managed by professionals with the technical expertise, ethical commitment and accountability to operate them properly. Skilled personnel are essential for ensuring e-governance platforms, procurement systems and financial oversight tools function as intended.

These individuals must be proficient in system analysis, design, implementation and auditing to prevent misuse or errors. Equally important is a strong ethical foundation. Without integrity and a commitment to transparency, individuals managing these technologies may be tempted to manipulate or exploit them for personal gain.

A successful transition to a rule-based digital society requires not just technical skills, but also ethical leadership, critical thinking and problem-solving abilities. Moreover, legal frameworks must evolve to manage the risks posed by emerging technologies like artificial intelligence, blockchain and big data.

These tools have the potential to enhance transparency but could also complicate anti-corruption efforts if not adequately regulated. Regulatory frameworks should ensure digital innovations serve the public good, while minimising risks of exploitation or oversight failures.

Double-edged sword

The relationship between digital transformation and corruption is complex, especially in countries like South Africa, where governance structures are neither fully rule-based nor entirely clan-based.

While digital technologies offer significant opportunities to fight corruption, they also pose new risks in environments where the rule of law is weak and unethical actors in key roles can manipulate these systems.

To fully harness the potential of digital transformation, South Africa must strengthen its institutions and nurture a governance culture that supports transparency, accountability and ethical leadership.

Without this much-needed change, digital technologies will continue to be a double-edged sword, capable of both combating and fuelling corruption.

South Africa must remain vigilant against the risks posed by clan-based governance. By reinforcing its institutions, strengthening regulatory frameworks, and cultivating a skilled and ethical workforce, the country can ensure its digital future promotes transparency and accountability, rather than becoming a tool for corruption.

* This article is based on ongoing research conducted at the Wits Faculty of Commerce, Law and Management's School of Business Sciences as part of the “30 Years of Democracy Project”.

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