For immediate release (23rd September 2025)
How Consulting Firms Enabled State Capture in South Africa
- Analysis shows how global consulting giant McKinsey, working with local partners, played an important role in South Africa’s state capture scandal.
- The study argues that consulting firms acted as crucial facilitators of state capture, undermining governance, weakening state capacity, and accelerating the cycle of dependency on external advisors.
- The study calls for stricter global accountability and reforms for consulting firms to address corruption risks.
A new study from the University of Sussex’s Governance & Integrity Anti-Corruption Evidence (GI ACE) Research Programme by Devi Pillay examines how global consulting giant McKinsey, in partnership with local financial advisory firms Regiments and Trillian, played a central role in South Africa’s state capture scandal by hollowing out public institutions while profiting from corrupt contracts.
The research, titled Consulting Firms, Corruption, and State Capture: A Case Study from South Africa published today (Tuesday 23 September) draws on evidence from South Africa’s Commission of Inquiry into State Capture and shows how consulting firms not only benefitted from inflated state contracts at Transnet and Eskom, but also legitimised corruption by lending their credibility to politically connected middlemen and compromised state officials.
Jacob Zuma’s tenure as president of South Africa (May 2009 – February 2018) – a country already struggling with corruption – was marked by a project of state capture. A network centred around Zuma worked to “capture” state institutions in order to secure lucrative state contracts for their business. While the Commission of Inquiry into State Capture did investigate the role of the private sector in state capture, it focused primarily on the failures of government institutions and officials.
Nevertheless, there have been persistent calls from civil society groups to hold these private companies accountable, as well as public outrage directed at a few of the implicated companies including banks, accountants, lawyers, and consulting firms (specifically McKinsey, Bain, and the consulting arms of KPMG, Deloitte, and PwC).
The study highlights how Transnet and Eskom – two state-owned enterprises responsible for managing vast budgets and capital expenditure – were particularly vulnerable. According to the Commission, 97% of public expenditure linked to state capture originated from these two companies.
The study argues that consulting firms acted as crucial facilitators of state capture, undermining governance, weakening state capacity, and accelerating the cycle of dependency on external advisors.
Key findings include:
- Consultants as enablers: McKinsey’s global reputation was leveraged to shield local partners Regiments and Trillian from scrutiny, allowing them to embed themselves inside state-owned companies and channel billions into Gupta-linked laundering networks.
- Hollowing out the state: Advisory services were repeatedly outsourced despite strong internal capacity at Eskom and Transnet. Skilled officials were sidelined or forced out, further decapacitating state-owned enterprises and leaving them more vulnerable to corruption and capture .
- Profit from failure: Contracts awarded to consultants were routinely inflated, non-competitive, and based on dubious “success fees” that rewarded poor advice—causing direct financial and institutional harm to public entities.
- Global complicity: McKinsey ultimately admitted to US anti-bribery violations and paid a $122 million fine, yet South Africa continues to suffer from the weakened institutions and debt burdens created by these deals.
University of Sussex Research Assistant and GI ACE Research Fellow Devi Pillay said “Consulting firms weren’t just bystanders to state capture; they were crucial facilitators of corruption in South African public entities. This case study shows how global professional service providers can become complicit in undermining democracy and draining public resources, especially when states are pushed to outsource critical functions.”
Contributing to ongoing debates about corruption and professional enablers, this working paper provides detailed evidence about the ways in which consultants and advisors can advance corruption within public institutions.
The study calls for stricter global accountability for consulting firms, reforms to address corruption risks related to “at-risk” fee models and the provision of financial advisory services in the public sector, and stronger measures to rebuild state capacity rather than relying on costly external advisors.
For interviews with Devi Pillay and for more information, please contact Suzana Salim at ss2387@sussex.ac.uk.
About the Governance & Integrity Anti-Corruption Evidence (GI ACE) Programme:
The GI ACE research programme, hosted by the Centre for the Study of Corruption, is dedicated to advancing the understanding of what works in tackling corruption, focusing on producing actionable, evidence-based research that informs effective policy interventions. GI ACE aims to bridge the gap between academic research and practical policymaking by addressing complex governance challenges and promoting solutions that are contextually relevant and scalable.