State failure widens our yawning wealth gap

For all its bluster about putting itself at the centre of a developmental state, South Africa's government is being remarkably successful at further enriching the private sector: thanks to its failure to provide basic services, the chasm continues to widen between those who can afford to opt out of the public system and the growing majority who cannot.

It's dangerous, divisive and in nobody's best interests.

Much was made this week of ace prosecutor Gerrie Nel's move to conservative interest group AfriForum. But if you set aside the noise about right-wing agendas, Nel's move tells a far more important story about South Africa's dual economy.

With the National Prosecuting Authority in disarray, Nel has been unable to function professionally, and, under internal investigation, found his tenure untenable. He argues he can do more good with access to funding to tackle selected privately funded prosecutions.

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The law, like education, security and pensions, is increasingly the domain of those who can afford it.

AfriForum's move towards legal services is no surprise. It's the evolution of a theme that has seen complex prosecutions outsourced to the private sector.

Private law firms count the government among their biggest clients, particularly when it comes to complex cases that require high levels of forensic investigation.

They compile dockets, seek plea agreements to avoid lengthy, costly court battles and, if the matter does make it to a judge, help prepare prosecutors.

Last year, for example, President Jacob Zuma got top advocate Jeremy Gauntlett to help dig him out of a hole of his own making - for an estimated R50,000 a day.

The private sector seldom covers itself in glory either, though. The looming standoff over grant distribution is likely to see a dodgy Net1 UEPS Technologies contract with the South African Social Security Agency (Sassa) extended for a year while the state tries to take the complex task in-house. Brace yourself.

The resignation this week of Gauteng health MEC Qedani Mahlangu following her department's disastrous decision to move more than 1,300 psychiatric patients from private hospital group Life Esidimeni to 27 unlawfully operating NGOs, with 94 of them dying in the process, hardly gives one confidence in the state's ability to reduce its dependence on the private sector.

Not to be outdone, Eastern Cape social development MEC Nancy Sihlwayi vowed to move frail-care patients, whose doctors had the temerity to provide them with oxygen at state-funded facilities, to NGOs.

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On top of this was ANC secretary-general Gwede Mantashe's announcement that the thousands of jobs put on the line by the torrent of cheap imported chicken could be saved if the state became a chicken producer. The idea of state intervention would be laughable if it were not so deadly serious. State failure entrenches and widens South Africa's considerable economic divide.

But when it comes to the private sector, recent history has shown just how dangerous unfettered dependence on companies can be, and it's naive to assume that the profit motive leads to ethical behaviour.

There has to be a better co-operative model under which the private sector can be adequately compensated for providing services - or, to use a political word, be incentivised - to deploy staff into the public sector to help create systems that enhance state efficacy.

Unlike a bank, where you can close a branch in a dying town, the service mandate of public-sector entities requires that they operate in one-horse towns long after the horse dies. The issues are deep and complex.

CEOs and directors-general need to find a way to work together. For the common good.

Whitfield is a public speaker on the political economy and an award-winning financial journalist and broadcaster