The Black Business Council (BBC) has condemned the involvement of the McKinsey and Bain consultancies in the work of the B20 — the business arm of the G20 — saying the taint of state capture corruption hangs over them.
Council CEO Kganki Matabane told Business Times on Friday that the involvement of McKinsey & Co and Bain & Co harmed the credibility of the B20.
We will formally ask the president to reject [what] the report that comes out of their report, because he would be taking in the outcome of activities by corrupt actors.
— Kganki Matabane, BBC
“If the B20 continues to work with McKinsey and Bain in their activities of the G20, we will formally ask the president to reject the report that comes out of their [discussions], because he would be taking in the outcome of activities by corrupt actors.”
McKinsey and Bain were at the centre of the state capture era under president Jacob Zuma. During this time, institutions such as Eskom, Transnet and the South African Revenue Service were stripped of financial assets as well as operational and governance capacity.
The Zondo commission report found that Bain was central to an organisational restructuring of Sars under former commissioner Tom Moyane, which weakened the institution’s capacity, a charge Bain has denied.
In 2022, Bain was banned from state contracts in South Africa for 10 years, a ban that the consulting company is fighting in court. The state capture commission found that McKinsey’s work for Eskom and Transnet was mired in irregular procurement practices. The company has since returned portions of the fees it charged SOEs for its services.
Bain is listed as a “knowledge partner” in the digital transformation task force of the B20. McKinsey is listed as the “knowledge partner” of the sustainable food systems and agriculture task force as well as the industrial transformation and innovation task force. The work of these task forces will be incorporated in a communique that will be referred to the Presidency and will inform the G20’s discussions at its summit in November.
Matabane said: “Our view is very clear. Any company that has been involved in state capture, which nearly collapsed our country, should not be given an opportunity to participate in anything, whether it’s for free or pro bono or whatever the case may be.
“Any person who uses McKinsey and Bain is promoting and sponsoring corruption, which means they are also corrupt. You can’t talk about dealing with corruption while you continue to associate with the corrupt.”
Neither McKinsey nor Bain responded to requests for comment. Three years ago Bain apologised for its work at Sars, but also said it was the victim of a “false narrative”.
Business Unity South Africa (Busa) and Business Leadership South Africa (BLSA) are co-chairs of B20 during South Africa’s leadership of the G20, and are jointly responsible for the forum’s programme.
Busa CEO Khulekani Mathe told Business Times that the various consulting firms that support the B20 — including McKinsey, Bain, Deloitte and Boston Consulting — had “become a point of continuity” for the business engagement forum.
“In relation to domestic developments in particular, you know what they [McKinsey and Bain] have done in trying to atone. We don’t hold a brief for them. The main reason is the continuity that they provide here. If they made no effort to right their wrongs in South Africa, we would take a different view.”
The G20 finance track has no plans to work with McKinsey (or Bain) on the G20. The B20 is an independent global dialogue forum
— Treasury statement
But Matabane said the need for continuity between B20 events did not justify the continued participation of the two consultancies in the B20’s activities.
“That is a very weak excuse for trying to promote corruption. It’s like saying one person has always been the CEO of a company and, therefore, must be a CEO forever.”
He said the BBC had met with Busa and BLSA to register its discontent with the involvement of the two firms.
Mathe said the B20 and its task forces were ahead of schedule in their work and had draft reports that were near finality. In a few weeks, the drafts will be finalised and the task forces will work towards presenting a report to the Presidency by September.
“They have been going exceptionally well ... We are ahead of time, if we compare to any other B20s of the past three years in terms of our readiness to have something we can present to the South African G20 presidency ... in terms of recommendations ... to consider.”
The National Treasury, speaking on behalf of the G20 finance track, said there was no partnership between the South African government and McKinsey.
The G20 finance track, which groups finance ministers and central bank governors, met at the Zimbali Resort in KwaZulu-Natal this week.
“The G20 finance track has no plans to work with McKinsey (or Bain) on the G20,” a Treasury statement said. “The B20 is an independent global dialogue forum.”
The Treasury referred questions to the B20 itself.
In 2022 BLSA CEO Busi Mavuso defended the organisation’s decision to keep Bain as a member after it repaid the R164m that it had charged Sars for its services. Mavuso wrote at the time that BLSA had held several engagements with Bain.
At the G20 finance track meeting at Zimbali on Friday, finance minister Enoch Godongwana said developing countries, especially in Africa, remained burdened by high and rising debt vulnerabilities, constrained fiscal space, and a high cost of capital that limited their ability to invest in their people and their futures.
“Technological shifts — especially in AI and digital finance — offer tremendous potential but also demand robust governance and co-ordinated action to harness the opportunities, mitigate risks such as job displacement, and bridge the digital divide towards inclusive growth,” he said.
National Treasury director-general Duncan Pieterse referred to global economic fragmentation risks. “The multilateral system is being tested, and our collective ability to respond will shape the pace of our recovery, but also the prospects for inclusive and sustainable development.”
The communique from the meeting said the global economy faced heightened risks from wars and conflicts, trade tensions, disruptions to global supply chains, high debt levels and frequent extreme weather events.
“Central banks are strongly committed to ensuring price stability, consistent with their respective mandates, and will continue to adjust their policies in a data-dependent manner. Central bank independence is crucial to achieving this goal,” it said.
The communique emphasised the importance of strengthening multilateral co-operation to address existing and emerging risks to the global economy.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.