Sands shifting under Zuma’s feet

LOSING SUPPORT: GUPTAS DECIDE TO SELL SA INVESTMENTS

President’s room to manoeuvre appears to be shrinking.

‘There’s a disjuncture between economic and political power.’

Reeling from his ruling party’s worst-yet election performance and a public backlash over a police investigation into his finance minister, the embattled President Jacob Zuma’s room to manoeuvre appears to be shrinking.

And he may be losing an important power base: the Gupta family that has been accused of exerting undue influence on Zuma has promised to sell up all its South African investments by year-end.

Gordhan charges

Anxiety over whether Zuma will fire Finance Minister Pravin Gordhan is growing.

The minister may face charges on allegations of setting up an illicit investigative unit during his time as head of the national tax agency. While Zuma expressed “full confidence” in Gordhan last week, he said he was powerless to stop the probe.

Opposition parties and analysts have speculated that Zuma may use the case to install a more compliant head of National Treasury and reassert his authority following the ANC’s local election losses.

Last week, the Cabinet said Zuma would be the chairman of a new committee to oversee stateowned companies.

Reuters reports that as criticism of Zuma mounted at the weekend, the Guptas – who have denied unduly using their friendship with Zuma to influence state policies or actions – believe the time has arrived to sell up their South African investments.

“We are already in discussions with several international prospective buyers,” the Guptas’ statement read.

Zuma, 74, was pressured into appointing Gordhan to his post in December after his decision to replace Nhlanhla Nene as finance minister with a little-known lawmaker sparked a sell-off in the rand and the nation’s bonds.

The two have been at loggerheads since, with Zuma brushing aside Gordhan’s pleas to fire the nation’s tax chief for insubordination and to replace the board of the loss-making state airline.

Currency fever

Fears that Gordhan’s job is in jeopardy pushed the rand to its lowest level in a month against the dollar last week, while yields on benchmark government bonds due in December 2026 surged the most since Zuma fired Nene.

“If you wreck the economy, you destroy your political career, but it seems there is a disjuncture between economic and political power,” said Robert Schrire, a politics professor at the University of Cape Town.