Mark Mobius, a veteran emerging market investor and co-founder of Mobius Capital Partners, said South Africa’s attempts to tackle the corruption that has stalled its economy for nearly a decade are encouraging.
About 500 billion rupees were 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 have been made and the ability of state bodies, including the national prosecutor, to perform their functions has been compromised by political appointments and the departure of competent personnel.
Since replacing Zuma, President Cyril Ramaphosa has appointed new boards for government-owned companies and sought to repair the state attorney’s service. The results of a judicial investigation into corruption have been made public and Ramaphosa is deliberating on what action to take against them.
“The fact that they have dealt with the corruption situation is somewhat surprising because the rule of law still has meaning in South Africa,” Mobius said in an interview on Friday. This “is not the case in some other countries, not just in Africa but in other parts of the world,” he said.
Mobius, 85, began managing one of the world’s first market funds in 1987 for Franklin Templeton Investment Funds and spent more than 20 years with that emerging company before founding his own company 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 for the slow pace of legal proceedings. While both Zuma and Ace Magashule – who has been suspended as general secretary of the ruling African National Congress – are facing trials for fraud, no senior political figures have been convicted. Zuma and Magashule deny any wrongdoing.
Eradicating corruption will allow the country to solve its other problems, such as the electricity supply crisis, which Mobius believes would be best solved by placing both the generation and transmission industries in private hands.
“The idea that you have to pursue corruption – and people at least think about it and care about it – is a very good sign,” he said. “I think South Africa is a step forward in this sense, the rule of law.”