Over 100 years before there was the infamous ANC government tender, there was widespread Boer "concession" corruption. Here's how Afrikaners invented and perfected state capture and looting

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In 1881, a Hungarian immigrant named Hugo Nellmapius, persuaded Afrikaner leader and future president of the South African Republic, Paul Kruger that a great way for the state to raise money was by selling what was called "monopoly concessions" to independent businessmen

Concessions meant private parties would be given rights to run state resources: land, water etc. A monopoly concession guarantees the recipient the sole right to run operations without the threat of competition. this is the kind that was proposed to Kruger by Nellmapius

Nellmapius submitted to Kruger that what was needed were industries to produce basics such as clothing, blankets, leather, flour sugar etc. These industries, Nellmapius asserted, needed to be protected by high tariffs to ensure they survive

However, according to Nellmapius, starting a business was too risky. What was needed were "privileges, patents, monopolies, bonuses et cetera". This would ensure that would-be entrepreneurs went into business with high levels of sure-footedness

Nellmapius proposed two monopolies to Kruger, one for distilling liquor and the other for sugar production. Both would be run by him and since operating a single factory would run to £100K (£1.2 billion today), he asked for at least 15 years during which he'd pay £1K a year

Nellmapius’ idea of a 15-year liquor monopoly concession was approved and he went business with Sammy Marks and his brother-in-law, Isaac Lewis. Together they built a factory at Nellmapius' farm and started distilling gin

As president of the Transvaal, the concessions policy was a central tenet of Kruger's government. He would personally grant rights to favoured individuals and companies

Kruger's preferred biddersbuilt not only factories but also public utilities: a state bank: water, gas and electricity supplies; municipal services in Pretoria, Johannesburg and other towns; tramways; roads; & shopping markets. It was a feeding frenzy for The President's Keepers

The monopoly concessions would charge exorbitant prices, for years at a time, because monopoly. Also this system gave birth to a new scheme: speculation, where people would secure rights and then instead of doing the work, they'd just sell the rights for a profit

In 1889, a concession to supply Johannesburg with water was granted to Frikke Eloff, Paul Kruger's private secretary and son-in-law.

The president's nephew made £20,000 (that's just over R5,2 billion today) out of the deal "without so much as digging a spadeful of earth"

A Frenchman named Eugène Oppenheim won a concession to build a railway spur to the Selati goldfields. this was after he himself said he had spent £30,000 on bribes to members of the Executive Council and Volksraad and their relatives and friends to get the rights

In 1887, a German concession-hunter Edouard Lippert, gained the exclusive right to manufacture dynamite, gunpowder, explosives and ammunition for sixteen years. He was permitted to import all raw materials and machinery tax-free, but not dynamite itself. Pretty straightfoward

Lippert sold this concession to a French-based company in Paris which appointed a Dutch businessman and Lippert himself as its chief salesman. However, these French company was not only importing raw materials, but also dynamite itself, in contravention of their contract

Kruger, who was part of the awarding of these manufacturing rights, rushed to defend French company. He pleaded for a compromise. He claimed, incredibly, that cancelling the contract would be an act against the government not against the company

In Kruger's own words: "It would destroy the credit of the State completely and bring rejoicing to our enemies." Oom Paul, as he was affectionately known, suggested that the government should take over the factory and then hand back management to Lippert, the French company

Land en Volk wrote: We understand [Kruger's] reluctance to expose the rottenness of his concession politics, but to suggest...that the State buy the factory & appoint a fraudulent company as officials is too much! Lippert is having coffee with the President every morning

Kruger didn't care. The government took over the dynamite monopoly and then signed a 15-year contract with a company in which Lippert and the French company were given shares in. Ownership of the dynamite industry was now in foreign hands, all profits going overseas

Just for comparison, in this new deal, the government made 5 shillings per case of dynamite, Lippert made 8 shillings, while the French company made 40 shillings - a 100% profit for them

Kruger was accused of trying to divert the railway line from Pretoria to Delagoa Bay (Mozambique) over the farms of his relatives and friends, Eloff and Nellmapius

Corruption was so widespread during Kruger's administration that even the pro-government newspaper the Pretoria Press had to admit that there was "wide-spread corruption in the civil service"

Senior government officials cared more for their own enrichment than for the interests of the state and the people while lower-ranking officials routinely expected bribes in return small favours

It was discovered that government officials, were buying up stands in Johannesburg without advertising them for sale, putting them up for auction and then selling them, usually within days, at huge profits; the minister of mines and his son were among the beneficiaries

This is what Kruger had to say about this: "The government had felt it better to save the costs of advertising in all the local newspapers, which came to more than the stands brought in, by selling the stands by public auction without advertisement."

Kruger was not only obstinate, he was also reckless. He would sign order-forms from the treasury without knowing why he was. In 16 years, £2.4 million (R600 billion today) was advanced to officials without proper records and accounts being held

This Paul Kruger is the same one who's statue still stands at Church Square in Pretoria. He's also the same one after whom the Kruger National Park is named

Further Reading: Diamonds, Gold & War : The British, the Boers and the making of South Africa by Martin Meredith