Gordhan, Zuma high noon
COLD WAR: ANC RIVALRY HOTS UP
‘There is no war’ is the first rule of Sun Tzu’s Art of War. It seems the president and the finance minister have been doing some reading.
Ayear after President Jacob Zuma began feuding with Finance Minister Pravin Gordhan over control of the nation’s purse strings, the conflict may be coming to a head. When he presents his annual budget in parliament today, Gordhan will seek to keep state spending in check and fend off a junk credit rating.
Opposite poles
Zuma, meanwhile, wants to spend billions of rands on new nuclear plants and embark on “radical economic transformation” to target yawning racial inequality and widespread poverty. This after the ANC suffered its worst electoral performance in a municipal poll in August.
The two men have scrapped over the management of state companies and the national tax agency, as well as a decision by the country’s biggest banks to close accounts of companies controlled by members of the Gupta family.
Speculation that Gordhan is on the
The budget is a major battleground for Gordhan and the Treasury. He doesn’t want the economy to implode under his watch.
Mzukisi Qobo Associate professor at the University of Johannesburg
verge of being fired has been fuelled by the ANC’s latest drive to install Brian Molefe, former Eskom CEO, as an MP, easing the way for Zuma to name him to his cabinet.
“Gordhan is under a lot of political pressure” and could be replaced in “a matter of months”, said Mzukisi Qobo, an associate professor at the University of Johannesburg and co-author of The Fall of the ANC: What Next. “The budget is a major battleground for Gordhan and the Treasury. He doesn’t want the economy to implode under his watch.”
Firing Gordhan would have “a very negative market effect”, said John Ashbourne, an economist at Capital Economics in London. “To sack one respected finance minister may be regarded as a misfortune. Sacking two looks like a conspiracy against the economy.”
The 74-year-old Zuma denies he’s at war with his finance chief or that he intends dismissing him. Yet Zuma has said a police investigation into allegations that Gordhan oversaw the establishment of an illicit investigative unit when he headed the tax agency that’s dragged on for more than a year must run its course. He also rebuffed his request to fire tax chief Tom Moyane for insubordination.
The National Treasury said last week that disinformation was being circulated to discredit its leadership before the budget.
Two days later, the ANC’s youth wing, a close Zuma ally, said Gordhan had failed to exercise proper oversight over more than a dozen banks accused by an antitrust regulator of having rigged foreign-currency trades, and called for him to be held accountable.
Local newspapers have speculated Zuma may tap Molefe to replace either Gordhan or his deputy Mcebisi Jonas, who last year accused the Guptas of offering him the finance ministry post in exchange for business concessions. The family denies the allegation.
‘Think twice’
While it’s clear Molefe has been earmarked for a senior government post, Gordhan has proved his staying power and Zuma’s authority is waning as his term draws to a close, said Dirk Kotze, a politics professor at the University of South Africa in Pretoria.
“President Zuma will think more than twice before he kicks out Gordhan and replaces him with Brian Molefe,” Kotze said. “There is a growing sense in the ANC that they don’t want to be seen as ridiculous and they don’t want to support people who are almost a laughing stock.” – Bloomberg