Zuma’s two roads to financial abyss

It would be easy to say that President Jacob Zuma does not grasp the economics of a complex mechanism like a country. That would then explain why the ANC leader appears to be hell-bent on going down two roads which could drag the country onto, and over, the precipice of financial ruin. The experts in the Treasury and department of finance have reportedly already expressed their firm opposition to Zuma’s proposals to spend taxpayer’s money the country does not have.

The nuclear deal has been described as all but off the table by Finance Minister Malusi Gigaba, who said the country could not afford it. And the projected demand for electricity, which has slowed considerably in recent years, does not warrant such a huge investment.

Yet, by appointing his close henchman, David Mahlobo, as energy minister, and then punting the nuclear option himself, Zuma has sent a clear signal that he is prepared to do anything to push the deal through.

The government’s finance experts have also reportedly told the ANC leader the country cannot afford free university education. Yet Zuma appears committed to some sort of plan to provide free tertiary education to at least some students.

Both plans have horrendous implications: everything from an increase in VAT to a cutback in other government services … all accompanied by a probable further ratings downgrade by international investment analysts.

The nuclear deal has the potential to make the corruption and state capture up to now look like a kiddies’ party and the education package will hurt the poor and middle class. The former will keep Zuma’s friends in Russia happy. The latter is a populist move aimed at outflanking opponents at the December elective conference. Zuma gets his way most of the time – but when Zuma wins, the country, invariably, loses.