Gordhan not blinking first
“LET me do my job,” said Finance Minister Pravin Gordhan as yet another day of sound and fury, smoke and mirrors came to an end. Gordhan, who was ordered to “present himself” to the Hawks yesterday in relation to the SARS investigative unit set up in 2007, has thrown down the gauntlet. Gordhan, following legal advice, declined to appear before the Hawks.
At that point in the drama, all the clichés were applicable. Gordhan was throwing down the gauntlet, he would not blink first, this was a war of attrition and the endgame for sure.
Certainly they all apply. The skullduggery could be from a Shakespearean play.
It feels a little like December as the rand immediately nose-dived on the back of the news of Gordhan’s possible arrest. There is a perfectly simple answer to all this: Gordhan and the relatively powerful Team Treasury have been doing a sterling job in overseeing South Africa’s macro-economic stability and ensuring that the ratings agency downgrades are kept at bay.
Most economists will say that they have already “factored in” a downgrade but, be that as it may, Gordhan has been preaching fiscal discipline and has been firm that government expenditure has to be cut.
He has steadfastly refused to grant SAA a R5-billion bailout and has said we cannot afford the nuclear deal or a 0% fee hike for universities. His predecessor, Nhlanhla Nene, now in the political wilderness (not the Brics Bank), was fired for saying precisely that too.
Gordhan, his deputy, Mcebisi Jonas, and national Treasury stand as a bulwark between South Africa and complete state capture. They have held the line against a maverick and dangerous populism, and nepotism within the ANC and from Jacob Zuma himself.
Gordhan’s stance represents an inconvenience for Zuma and his cronies. He therefore must be replaced.
Removing Gordhan or pressuring him to resign would ensure that someone more pliable might be appointed, thus allowing Zuma and his merry band free rein over state-owned enterprises (SOEs) and related contracts worth billions.
Zuma yesterday said he had “full support and confidence in the minister of finance”‚ but lacked the “powers to stop any investigation” into him.
In an angry speech earlier in KwaZulu-Natal Zuma denied he was a liability to the ANC. It was Gwede Mantashe who had to front up during a post-NEC press conference, muddling his way through “collective responsibility”.
But he knows and we all know that the ANC’s poor electoral showing is in large part due to Zuma and the impunity with which he governs. What does Zuma do?
He unleashes the Hawks on Gordhan, and attempts to shore up his and his cronies’ wealth ahead of an ANC leadership contest next year.
Former finance minister Trevor Manuel has called on the president to exercise his “constitutional responsibility” and protect Gordhan. Manuel’s call is laudable, but this is a president who has scant regard for the constitution, as has been seen repeatedly.
He governs only in his own narrow interests and the interests of those within his patronage network. We are dealing with a president who is a threat to the very fabric of our constitutional democracy.
Gordhan knows that and Mantashe does too, but given the balance of power within the ANC, he just seems powerless to stop the wreck.
This would not be South Africa if there weren’t some bitter irony. Hawks head Mthandazo Ntlemeza is the same person the North Gauteng High Court found to be unfit to hold his position, Justice Matonjane saying Ntlemeza was “biased, dishonest and lacks integrity and honour”, and he made false statements under oath.
One might say that an application to set aside Ntlemeza’s appointment would be appropriate.
What we are experiencing is vintage Zuma – all part of a single narrative which has shown us over and over again that he is unfit to govern. The further irony is that Zuma himself has more than 700 charges of fraud and corruption hanging over him – it is only a foolhardy appeal process that is keeping the inevitable at bay.
That Gordhan might face charges of corruption for granting former SARS deputy head Ivan Pillay early retirement is thus laughable. On Tuesday both SABC chief operating officer Hlaudi Motsoeneng and Communications Minister Faith Muthambi refused to account to parliament for wastage at the SABC, and the investigation into the Prasa locomotive deal seems off the table amid rumours that the probe could again lead to Zuma and his network.
And so again we watch an intense power struggle play itself out at the expense of governance and the economy. Gordhan, buoyed by support from within, from powerful business and civil society lobbies, and with the law on his side (all signs are that the Hawks have no case against him), clearly feels emboldened not to “present himself” before the ham-handed Hawks. In this scenario Gordhan stymies Zuma and his cronies while Zuma lends Gordhan no support. It’s stalemate, not checkmate. Alternatively, Zuma lashes out and dares to fire Gordhan, this time replacing him with someone pliable but more acceptable to the markets. In that scenario we witness looting of the state with a less brazen veneer, because what possible reason would Zuma have to remove the very capable and trusted Gordhan except to get his hands deeper into the SOE cookie jar?
Zuma may well over-extend himself, precipitate a crisis and lose the war. The nearer the ANC gets to its elective conference, the more Zuma will have to lose as patronage seeps away from him and possible new players enter.
The ANC has also lost access to the patronage that comes from running major metros. Zuma may yet find himself isolated as many second-term presidents eventually do.
The ANC NEC is dominated by Zumarites who for now hold the balance of power, yet power is a fickle thing. ANC treasurer-general Zweli Mkhize, hovering in the background, should not be underestimated.
Close to Zuma but a pragmatist, he was key to brokering the appointment of Gordhan. It will take some fancy footwork from those decent men and women in the ANC – who are outnumbered right now – to get South Africa out of this mess.
In this fast-moving, unpredictable environment, anything is possible. Therefore, business and civil society cannot afford to be bystanders and wait for the ANC to sort itself out.
Already Business Leadership SA and a group of economists have warned in open letters of the dire consequences of removing Gordhan from his position. This pressure needs to be stepped up.
Gordhan too will need to play his cards carefully. He needs to win the war and not be distracted by the battles.
State capture is difficult in places where transparency is a key governance principle. Shining light on the dark places is critical in the next months and the media will have a crucial role.
When Zuma met the chief executives of the Top 100 companies, he assured them that the government would act to deliver the necessary economic reforms and that Gordhan had his backing to bring about the economic stability necessary. Then chief executives were sceptical because they had heard the words before.
Last year veteran Financial Times journalist Martin Wolf visited South Africa for the first time in 15 years. Wolf’s concern is for a slide to populism of the wrong kind when he says:
“The fundamental point is that if the country does not shift to a path of faster, employment-generating growth, the populist disaster seems increasingly inevitable. It may be too late to make the needed switch, particularly with President Jacob Zuma at the helm.
“But the stagnation and high unemployment of today are a politically unsustainable combination. Change will come. Let it be in the right direction.”
And, one might add, let Gordhan do his job.
Judith February is based at the Institute for Security Studies. This article first appeared in Daily Maverick.