How the Trea­sury blocked Zuma ...

... and how he put nofees plan by daugh­ter’s ex back on the table Panic as pres­i­dent tries to push R40bn pop­ulist plan by fiat

Sunday Times - - FRONT PAGE - By SABELO SKITI and THANDUXOLO JIKA

What is clear is that Fi­nance Min­is­ter Malusi Gi­gaba’s mini bud­get is be­ing un­der­mined by this process Se­nior gov­ern­ment of­fi­cial On Zuma’s fee plan

Pres­i­dent Ja­cob Zuma’s bud­get-bust­ing plan for free higher ed­u­ca­tion set off a flurry of panic among se­nior gov­ern­ment of­fi­cials this week, even prompt­ing threats by a se­nior Na­tional Trea­sury of­fi­cial to re­sign should the pro­posal go ahead.

The pres­i­dent had planned to an­nounce the R40-bil­lion free ed­u­ca­tion plan on Tues­day last week, but held off amid warn­ings from of­fi­cials that such a move would plunge South Africa into an eco­nomic cri­sis.

It also emerged this week that Zuma had ini­tially wanted to an­nounce the plan dur­ing his state of the na­tion ad­dress in Fe­bru­ary, but had been forced into a hu­mil­i­at­ing climb-down af­ter shocked se­nior of­fi­cials at the Trea­sury and in the Pres­i­dency scram­bled to put the brakes on it.

“Where have you ever heard of such an im­por­tant an­nounce­ment be­ing made and there be­ing no de­tail on it in the bud­get two weeks later?” a gov­ern­ment of­fi­cial in­volved in the process said this week.

Un­daunted, Zuma has pushed on with the plan over the past few months, rais­ing fears that a par­al­lel bud­get­ing process was be­ing in­tro­duced — one that could be used to se­cure fund­ing for the R1-tril­lion nu­clear deal, even though South Africa is fac­ing a rat­ings down­grade later this month amid con­cern over spi­ralling pop­ulist-style spend­ing.

Michael Sachs, the Trea­sury’s deputy di­rec­tor-gen­eral of bud­get­ing, is be­lieved to be so an­gry about the is­sue that he un­der­took this week to re­sign if the plan — drawn up by Mor­ris Ma­sutha, an ex-boyfriend of Zuma and Nkosazana Dlamini-Zuma’s daugh­ter Thutuk­ile — is an­nounced. Sachs de­clined to com­ment on Fri­day.

A se­nior gov­ern­ment of­fi­cial said sev­eral meet­ings were held last week­end with Zuma as he wanted the Trea­sury to find money for the Ma­sutha pro­posal.

“Dondo [Trea­sury Di­rec­tor-Gen­eral Dondo Mo­ga­jane] was kept very busy run­ning from one meet­ing to an­other. But what is clear is that Fi­nance Min­is­ter Malusi Gi­gaba’s mini bud­get is be­ing un­der­mined by this process,” said the of­fi­cial.

A source said Ma­sutha, 28, had been a con­stant fea­ture at the Trea­sury since he pre­sented his bold plan to the en­tire up­per ech­e­lons of gov­ern­ment ear­lier this year, at the ar­range­ment of the pres­i­dent.

Ma­sutha is a for­mer pres­i­dent of the stu­dent rep­re­sen­ta­tive coun­cil at the Univer­sity of the Wit­wa­ter­srand. He holds a bach­e­lor’s in eco­nomic ge­og­ra­phy from Wits, a mas­ter’s in small en­ter­prise de­vel­op­ment from the Univer­sity of Jo­han­nes­burg and is study­ing to­wards a PhD in higher ed­u­ca­tion man­age­ment at the Univer­sity of Bath in the UK.

He is be­lieved to have been is­su­ing in­struc­tions us­ing the pres­i­dent’s name and rub­bing of­fi­cials up the wrong way. Work­ing along­side him is Mpumi Mpofu, direc­torgen­eral of the De­part­ment of Plan­ning, Mon­i­tor­ing and Eval­u­a­tion, who Pres­i­dency spokesman Bon­gani Ngqu­lunga con­firmed was the in­ter­min­is­te­rial com­mit­tee’s ad­min­is­tra­tive leader.

The source said: “The first time I heard of him was when, some time be­fore [the state of the na­tion ad­dress], the pres­i­dent called his en­tire cab­i­net and di­rec­tors-gen­eral to Mahlamba Nd­lopfu [his Pre­to­ria res­i­dence] to lis­ten to this plan.

“Blade [Nz­i­mande, the higher ed­u­ca­tion and train­ing min­is­ter at the time] said it was in­ter­est­ing, but re­ferred it to the tech­nocrats serv­ing on the in­ter­min­is­te­rial com­mit­tee on higher ed­u­ca­tion.”

The Sun­day Times has seen a copy of the doc­u­ment, ti­tled A Pre­sen­ta­tion to the In­ter­min­is­te­rial Com­mit­tee on Higher Ed­u­ca­tion Fund­ing Cri­sis, which was pre­sented on Jan­uary 23.

It calls for the gov­ern­ment to an­nounce

free higher ed­u­ca­tion, in line with res­o­lu­tions taken at the ANC’s Polok­wane and Man­gaung con­fer­ences, through “fully sub­sidised free univer­sity ed­u­ca­tion for all 2017 new univer­sity en­trants com­ing from fam­i­lies with a com­bined an­nual house­hold in­come of up to R350 000”.

This, Ma­sutha’s paper goes on, would be a bold step to­wards re­solv­ing the higher ed­u­ca­tion fund­ing cri­sis and would be fol­lowed by an an­nounce­ment of an ex­pec­ta­tion that the pres­i­den­tial com­mis­sion on higher ed­u­ca­tion fund­ing would come up with an in­clu­sive and com­pre­hen­sive fund­ing model for all un­der­grad­u­ate stu­dents.

The pro­posal was largely re­jected by the in­ter­min­is­te­rial com­mit­tee, headed by Min­is­ter in the Pres­i­dency Jeff Radebe, be­cause it pre­sented a sig­nif­i­cant risk to the econ­omy and threat­ened to plunge the higher ed­u­ca­tion sec­tor into fur­ther cri­sis as it did not ac­com­mo­date stu­dents study­ing at tech­ni­cal vo­ca­tional ed­u­ca­tion and train­ing in­sti­tu­tions.

The Sun­day Times un­der­stands that the lat­est re­vised plan by Ma­sutha, which is costed at R40-bil­lion, in­cludes stu­dents at tech­ni­cal col­leges.

One se­nior gov­ern­ment of­fi­cial told how he was shocked to see Zuma’s thoughts on ed­u­ca­tion in a copy of his pre­pared speech for the state of the na­tion ad­dress — lifted word for word from Ma­sutha’s doc­u­ment.

The source said a se­nior of­fi­cial called his coun­ter­part in the Pres­i­dency to stop the an­nounce­ment.

But the plan lived to see an­other day as the Trea­sury — just a week af­ter Gi­gaba’s maiden medium-term bud­get speech last month — was ordered by Zuma to find R40­bil­lion to al­low him to an­nounce that the gov­ern­ment would phase in free fully sub­sidised ter­tiary ed­u­ca­tion from 2018.

This has been de­scribed by gov­ern­ment lead­ers and econ­o­mists as mak­ing a mock­ery of the bud­get­ing process, which in­cludes months of con­sul­ta­tion cul­mi­nat­ing in cab­i­net res­o­lu­tions.

“Now it’s this, maybe next week it could be nu­clear. One can just wake up and say I want this and there is no process to eval­u­ate the trade-offs and im­pli­ca­tions of this thing,” said a se­nior gov­ern­ment source who asked not to be named.

An­other said the plan — which Zuma is said to have told cab­i­net mem­bers last week was the big­gest an­nounce­ment since 1994 — put the strug­gling econ­omy at great risk.

“It’s pure pop­ulism, and pan­der­ing to a con­stituency that is very ac­tive but with­out a plan. You are just an­nounc­ing in or­der to in­flu­ence per­cep­tions with­out be­ing se­ri­ous about do­ing it.

“Ef­fec­tively there is no bud­get of­fice any­more, and the fis­cal frame­work is in tat­ters.”

Ngqu­lunga, the pres­i­dent’s spokesman, said this week that the rel­e­vant min­is­ters would ad­vise Zuma on the way for­ward, and “as soon as the min­is­ter of fi­nance re­turns from abroad the process will con­tinue at a faster pace”.

He did not re­spond to di­rect ques­tions on Ma­sutha, say­ing: “There is no in­di­vid­ual who can over­ride the gov­ern­ment pro­cesses in man­ag­ing such an im­por­tant pro­gramme for gov­ern­ment and the coun­try.”

Zuma has yet to re­lease the He­her com­mis­sion’s re­port on higher ed­u­ca­tion fees.

Of­fi­cials in­sist the Trea­sury is not against free ed­u­ca­tion.

“The right way to do this is to say let’s ap­ply our minds prop­erly and ask what sac­ri­fices we will have to make, whether it’s lower salaries for pu­bic ser­vants, a re­duced de­fence force, or rais­ing VAT . . . let’s have some process to con­front the prob­lem and the trade-offs that will have to be made,” said an of­fi­cial. “[Now] no one knows what will hap­pen.”

Gi­gaba’s spokesman, May­ihlome Tsh­wete, re­ferred queries to the Pres­i­dency.

Mor­ris Ma­sutha, 28, pre­sented his plan to the cab­i­net at a meet­ing hosted by Zuma.

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