Quoting figures from the Special Investigating Unit, Vavi said 360 cases of conflict of interest, involving R3.5-billion, were being investigated.

Speaking in Pretoria after his appointment as chairman of the National Anti-Corruption Forum, Vavi said the current policy, which allows public servants to do business with the government provided they "declare their interests", was not enough.

"[The Special Investigating Unit] suggests that up to 20% of the government's procurement budget was being lost to corruption and therefore lost to delivery," he said.

Vavi said the current policies should be scrapped.

He said that recent audits by the a uditor- general and figures from the Public Service Commission on the large sums of money being lost to corruption we re an indication that there wa s a need for change.

"That is why we should fully support the Public Service Commission's call that public servants be banned from doing business with the government. They must choose either to serve the public or to go into private business, but never the two at the same time.

"The same rule should apply to labour union and civil society leaders," he said.

The ANC has built a wall of resistance to protect the current policy.

The government has maintained that it would be wrong to ask state employees not to do business with the government, stating that opportunities should be open to everyone.

In 2009, the ANC said in its election manifesto: "We will step up measures to ensure politicians do not tamper with the adjudication of tenders, that the process of the tendering system is transparent as well as ensuring much stronger accountability of public servants involved in the tendering process."

Vavi, however, said that recent figures from the auditor-general and the Public Service Commission showed that the government was not enforcing these measures.

"As long as we are seen to be too scared and unwilling to challenge the growing power of the few who continue to damage the image of political organisations, business formations, civil society formations and, more worryingly, the government, all of them will continue to be discredited," Vavi said

He said figures from the commission showed that in 2010-2011 838 senior [government] officials were charged with financial misconduct, and that the figure had shot up from 689 and 652 in the previous two years.

Vavi said an urgent national debate was needed on how South Africa could turn around this disaster.