Care­fully walk­ing a tightrope — but also sound­ing a warn­ing

Gord­han’s ‘in­clu­sive growth’ is merely a sub­sti­tute for Zuma’s ‘rad­i­cal eco­nomic trans­for­ma­tion’. But the pres­i­dent is in­ter­ested in none of that. He is un­der too much pres­sure and he wants to re­place the fi­nance min­is­ter

Financial Mail - Investors Monthly - - Budget 2017 - Peter Bruce

This is how it works here. Some­time rel­a­tively early ev­ery Fe­bru­ary, the pres­i­dent gives a state of the na­tion ad­dress. Ef­fec­tively it is the open­ing of par­lia­ment in the new cal­en­dar year.

The pres­i­dent uses the ad­dress to de­clare things. This time it was the Year of Rad­i­cal So­cial & Eco­nomic Trans­for­ma­tion. By way of com­par­i­son, for in­stance, 2011 was the Year of Job Cre­ation.

Then, a few weeks later in Fe­bru­ary, the fi­nance min­is­ter de­liv­ers the na­tional bud­get for that year. In it, he is sup­posed to not so much echo the pres­i­dent but to give some sub­stance to what the pres­i­dent said, to make the pres­i­dent’s speech sound not only rea­son­able and thought­ful, but af­ford­able too.

Any alien lis­ten­ing to fi­nance min­is­ter Pravin Gord­han’s bud­get would have thought he had done a pretty good job. He twice men­tioned the word “rad­i­cal”.

Here was one of them: “. . . Pres­i­dent [Ja­cob] Zuma ar­tic­u­lated this in the state of the na­tion ad­dress, rightly em­pha­sis­ing the rad­i­cal na­ture of the so­cioe­co­nomic trans­for­ma­tion we need”.

For a non­alien, sadly, the gulf be­tween Zuma and his fi­nance min­is­ter never seemed wider than it did on Wed­nes­day. Gord­han was care­ful to touch all the right but­tons but the two men live in dif­fer­ent worlds.

For Gord­han, what would be “rad­i­cal” would be an ANC cabi­net min­is­ter ac­tu­ally im­ple­ment­ing a promised pol­icy. In other words, “do your job prop­erly”, “im­ple­ment pol­icy”, “ac­tu­ally help the poor” are rad­i­cal and trans­for­ma­tive no­tions.

For Zuma “rad­i­cal” is a word ap­pro­pri­ated from the Left to make him­self more pop­u­lar as his time in of­fice (in both party and state) runs out. It is also some­thing he uses to counter stri­dent left-wing op­po­si­tion to his deeply im­proper re­la­tion­ships with a hand­ful of rich busi­ness peo­ple.

Zuma, for in­stance, wants his friends to be able to buy a bank. That would be “rad­i­cal”, in the way he sells it, be­cause not many blacks in SA own banks.

Gord­han, who doesn’t want Zuma’s friends to own a bank, would rather see “rad­i­cal trans­for­ma­tion mea­sures” in the fi­nance sec­tor — like mak­ing sure that ANC pro­grammes re­ally do cre­ate jobs, that trans­for­ma­tion “must be mass-based” and must “en­trench open, trans­par­ent gover­nance and the rule of law”.

He sub­sti­tutes “in­clu­sive growth” for Zuma’s “rad­i­cal trans­for­ma­tion”. Ba­si­cally they mean the same thing, but one im­plies some mea­sure of pru­dence.

Zuma is in­ter­ested in none of that. He is un­der too much pres­sure and he wants Gord­han out. So the ques­tion is, did Gord­han do enough yes­ter­day to save him­self in any forth­com­ing cabi­net reshuf­fle?

We all know the story. This is his sec­ond stint in the job, hav­ing been brought back into trea­sury af­ter Zuma fa­mously tried and failed, in De­cem­ber 2015, to in­stall a patsy as fi­nance min­is­ter to please his cronies.

Since then, Gord­han has fought an up­hill bat­tle against Zuma, the cronies, many mem­bers of cabi­net, the po­lice and the Na­tional Prose­cut­ing Au­thor­ity. Lit­tle won­der he re­ceived a stand­ing ovation merely for step­ping up to the podium. Lesser men would have fallen long ago.

Now the SA body politic is alive with ru­mour and spec­u­la­tion. At the end of the year the ANC will elect a new leader. Zuma will not be a can-

di­date. But what will hap­pen then? What will hap­pen be­fore ? What will hap­pen later this week?

No-one knows. Zuma is said to carry a mas­ter plan in his head, but don’t be­lieve that. He is mak­ing it up as he goes along.

Fac­ing the res­ur­rec­tion of some 780 counts of fraud against him should he lose the pro­tec­tion of his of­fice, Zuma has looked around for a suit­able suc­ces­sor. And he has set­tled, with al­most no imag­i­na­tion, on Nkosazana Dlamini-Zuma, who hap­pens to be an ex-wife and the mother of some of his chil­dren. This is the ANC vet­eran he packed off to run the AU Com­mis­sion for the past four years, to keep her out of do­mes­tic pol­i­tics.

In his syl­van view of the world, what mother would put her chil­dren’s fa­ther in jail? And he may well be right. Dlamini-Zuma re­mains in­dis­putably fond of him.

But Zuma has been naughty while she has been away. His friend­ships with the Gupta fam­ily and a range of their po­lit­i­cal favourites in the higher ech­e­lons of pro­vin­cial ANC pol­i­tics are an un­set­tling in­her­i­tance for Dlamini-Zuma. That, in turn, leads to fur­ther com­pli­ca­tions, as some of these pro­vin­cial power bro­kers think about putting their own hands up for his job. Dlamini-Zuma would look af­ter Zuma, they’d agree, but would she look af­ter them too?

There’s no know­ing for sure, which is why, to get back to the point, Gord­han has to go. Zuma needs a min­is­ter in the trea­sury who will give min­is­ters and cronies the money and the con­tracts they want. Call it “ac­cess” and it sounds pro­gres­sive and cor­rect. In turn, these peo­ple — all sat­is­fied and sated — will help him get Dlamini-Zuma elected.

Never mind the debt ceil­ing. Never mind fis­cal con­sol­i­da­tion, ar­gues “rad­i­cal trans­for­ma­tion” Zuma. Let’s just go for it.

And he has just the man for it: Brian Molefe, former deputy di­rec­tor-gen­eral in na­tional trea­sury, former CEO of the Public In­vest­ment Corp, former CEO of Transnet and, un­til re­cently, CEO of Eskom.

Molefe’s a good man­ager, there’s no doubt. He in­spires love and loathing. He gets things done. He has a swash­buck­ler’s ap­proach to dan­ger. For Zuma, he’d be the per­fect man to re­place pru­dent old Gord­han. But there’s a prob­lem, as al­ways.

Last year former public pro­tec­tor Thuli Madon­sela pro­duced a re­port of what we South Africans call “state cap­ture” — the abil­ity of fam­i­lies like the Gup­tas to get Zuma to do their will — that was par­tic­u­larly harsh on Molefe. He fa­cil­i­tated the fire sale of a rich and Eskom-tied coal mine to the Gup­tas and made re­peated calls to the Gupta house­hold dur­ing the pe­riod around the trans­fer of the mine.

It got to him. He broke down in tears at a press con­fer­ence and re­signed from Eskom a few days later. Zuma likes Molefe, and knows he could do what is re­quired. But he doesn’t know if he can take the pres­sure of public life.

This is be­cause there is pres­sure — and then there is public pres­sure. How would he stand up to a grilling in par­lia­ment, or to in­sults from the Left? There are al­ready pho­to­graphs of the houses that he owns do­ing the rounds on­line. This is as he be­comes em­broiled in a deeply shady row over which branch of the ANC he be­longs to (he has to be­long to one so that Zuma can make him an MP and bring him into par­lia­ment and then, pos­si­bly, into cabi­net).

Three branches have claimed him so far. It is a joke and it will all be agony to a pri­vate man like Molefe. The fact is that while Zuma may want Molefe now, he is liv­ing on his nerves and is eas­ily dis­tracted.

The wider strat­egy has to be to get Dlamini-Zuma elected ANC pres­i­dent at the end of this year, prob­a­bly against the op­pos­ing can­di­dacy of deputy pres­i­dent Cyril Ramaphosa.

Ramaphosa should, on pa­per, be a strong con­tender. He is the deputy, af­ter all, and very ex­pe­ri­enced; a great ne­go­tia­tor; and sup­pos­edly in­cor­rupt­ible as he is al­ready ex­ceed­ingly rich.

One school of thought is that Zuma could send Ramaphosa to trea­sury (a plau­si­ble replacement for Gord­han) and make Dlamini-Zuma the deputy pres­i­dent, thus po­si­tion­ing her more per­fectly for the ANC’s vote in De­cem­ber.

Or, per­haps, with her as deputy, he could step down early as head of state and al­low her to con­test the ANC job as a sit­ting or act­ing pres­i­dent of the coun­try. But for that sce­nario to stand a chance, Ramaphosa would have to go qui­etly.

Sce­nar­ios like this arise be­cause Ramaphosa has been so help­ful and quiet a deputy to the out­ra­geous reign of Zuma that some peo­ple sug­gest Zuma has some­thing on him; that he can be black­mailed. I doubt that’s the case, but Ramaphosa needs to be­gin to show his hand much more force­fully than he is do­ing — or he will not have the re­quired mo­men­tum by the time the De­cem­ber con­fer­ence gets to vote.

Ev­ery­body knows broadly what is go­ing on. The in­fight­ing in the Zuma gov­ern­ment and the Zuma ANC is at close quar­ters — of­fice to of­fice, face to face. In his bud­get speech Gord­han tried to warn Zuma while he also tried to sup­port him.

“Our growth chal­lenge is in­ter­twined with our trans­for­ma­tion im­per­a­tive,” he said. “We need to trans­form in or­der to grow, we need to grow in or­der to trans­form. With­out trans­for­ma­tion, growth will re­in­force in­equal­ity, with­out growth, trans­for­ma­tion will be dis­torted by pa­tron­age.”

Whether or not Zuma was lis­ten­ing is moot. He wouldn’t care much any­way.

What he would have no­ticed, though, was a re­mark­able gap in all the trib­utes that fi­nance min­is­ters make as they am­ble through their bud­get speeches, thank­ing this min­is­ter for her pru­dence, con­grat­u­lat­ing that one on a pro­gramme com­pleted.

Not once did Gord­han men­tion the name of Tom Moy­ane, com­mis­sioner of the SA Rev­enue Ser­vice, a Zuma ap­pointee for whom Gord­han has no re­gard or re­spect what­so­ever. Moy­ane knows al­most noth­ing about tax. He is a former pris­ons com­mis­sioner, and a close Zuma con­fi­dante whom Gord­han has been un­able to move.

If any­thing, Gord­han’s fail­ure to men­tion Moy­ane was a di­rect chal­lenge to Zuma. He was, he’d ad­mit, be­ing de­lib­er­ately rude and he made a point of re­mind­ing the pres­i­dent that tax rev­enues this year are short R30bn, re­flect­ing slower wage growth and bonus pay­outs — “among other fac­tors”.

This may well have been Gord­han’s last bud­get. Those “other fac­tors” — Moy­ane’s in­abil­ity, in Gord­han’s view, to run a suc­cess­ful rev­enue ser­vice, con­stant in­fight­ing and Zuma’s cronies’ in­flu­ence over pol­icy — will make tak­ing the fi­nal call from Zuma that much eas­ier.

He’ll leave be­hind him the finest team of public ser­vants in the coun­try and a sovereign rat­ing still, just, in the black. Let some­one else come and mess it all up.

Ja­cob Zuma

Nkosazana Dlamini-Zuma

Brian Molefe

Ajay and Atul Gupta

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.