NENE: I DID IT FOR SA
Axed minister defends record of standing up to SAA chair as Presidency issues ’love child’ denial
AXED finance minister Nhlanhla Nene says he acted “in the best interest” of the country when he took on President Jacob Zuma’s close ally, SAA chairwoman Dudu Myeni.
His instruction to the SAA board that it must conclude its approved deal with French manufacturer Airbus, he said, was to “protect the fiscus” as missing the deadline for the deal would have been “quite disastrous” for the country.
Within days of Nene issuing the instruction, Zuma announced that he had fired him, replacing him with a relatively unknown MP, David van Rooyen.
Nene’s showdown with Myeni appears to have been the last straw for Zuma, who is said to have been unhappy with his finance minister because of National Treasury delays in approving finance for the controversial nuclear build programme.
Nene’s removal from cabinet sent the rand into a tailspin and precipitated unprecedented public condemnation of the president, with thousands taking to social media to demand that Zuma be recalled from office.
Fitch downgraded four of South Africa’s biggest banks on Friday night to the lowest investment grade, which will raise the banks’ cost of borrowing, with knock-on effects for consumers.
The fallout has also revealed a growing rift between Zuma and the ANC-led tripartite alliance, with not even Luthuli House coming to the president’s defence.
In contrast to Zuma’s isolation, Nene has received overwhelming support from within and outside the ruling ANC.
Speaking to the Sunday Times on Friday, Nene said he did not regret his handling of the SAA saga, and he believed he had led the National Treasury with distinction during his 18 months as finance minister.
“I would like to believe I’ve got a clean record. I look back with no regrets, if I were to say that, in my short stint at the Treasury,” he said.
His fight with Myeni was not personal, he said; it was about “reining in the board as they were not doing what was supposed to be done in time”.
Nene’s fear was that the SAA board’s delay in concluding the Airbus deal would have left the Treasury to meet the airline’s financial obligations in the deal.
“I did what was in the best interest of the country. What was in the best interest also of protecting the fiscus because a call on [SAA’s state] guarantees would’ve been quite disastrous. It would have had far-reaching implications and I hope that even beyond this there will be a process to try and arrest the situation,” Nene said.
With the economy in turmoil amid talk that Zuma had acted against Nene to protect Myeni — who has close ties to the president — the Presidency yesterday sought to downplay the controversial SAA chairwoman’s influence.
“The SAA receives directives from the Minister of Finance and works under the guidance of that Ministry. No member of the SAA Board is above the Minister of Finance or can operate outside of the mandate and direction provided by the Minister of Finance and the National Treasury,” Zuma’s office said.
The Presidency further denied rumours “about a romance and a child” between Zuma and Myeni, saying these were “baseless and designed to cast aspersions on the President”.
“Myeni is the chairperson of the Jacob Zuma Foundation. Her relationship with the President is purely professional,” it said.
Nene’s stand-off with Myeni reached boiling point when he wrote to her last week telling the SAA board that he did not support its proposal for an outright purchase of five A330 planes.
Although reluctant to grant a full interview as he is no longer minister, Nene did indicate that he would have taken action against the SAA board for misleading him and parliament by claiming to have secured funding for a restructured deal.
“We found that there wasn’t [such] engagement [with the financial institutions] . . . We wanted them to give us evidence of such engagement . . . Until such time that they are not able to produce such evidence we would have taken action,” he said.
On Thursday morning, a dejected Nene bid an emotional farewell to his closest confidants at the Treasury.
“Hold the fort. Your job is the most important in the country,” he is said to have told staff — with a senior official saying Nene seemed close to tears as he spoke. (See Page 6)
An insider with intimate knowledge of SAA dealings said the board held a teleconference on Friday where it resolved to petition Van Rooyen to withdraw Nene’s decision on the Airbus deal.
The backlash from Nene’s ousting seems to have taken Zuma by surprise and sent the rand on a downward spiral as the markets reacted to the decision — with the local currency breaching R16 to the US dollar for the first time in history.
Yesterday, ANC secretary-general Gwede Mantashe did not want to comment on the fallout from Zuma’s decision, saying: “Anyone in their right mind would be concerned [about the state of the economy] but I am not going to talk about this.”
A call on the guarantee (on SAA) would’ve been quite disastrous Fitch downgraded four of SA’s biggest banks to the lowest investment grade
The ANC will hold what is supposed to be the last meeting of its national working committee at Luthuli House tomorrow.
ANC stalwart and former public enterprises minister Barbara Hogan called on the ANC to remove Zuma from office.
South Africa’s captains of industry have resolved to request a meeting with Zuma about the state of the economy.
Business Leadership South Africa, whose members pay 80% of corporate tax, said: “The replacement of an effective and trusted finance minister just 18 months into his term has raised doubts about South Africa’s ability to maintain prudent macroeconomic policies.”
The Young Communist League also took the opportunity to attack Zuma, suggesting that he acted alone in firing Nene whereas “collective leadership is the cornerstone of our revolution”.
The chairman of the ANC’s economic transformation subcommittee, Enoch Godongwana, said they were “disturbed” by what had happened to the rand and instability in the economy
“In my interaction with the number of institutions over the past few days . . . I think there are three issues, the first one is the timing of this reshuffling . . . just a couple of days after [the ratings agency downgrade].
“The underlying perception is that there is more to the reshuffling than the mere changing of the individual.
“Another perception is that Treasury as an institution has earned respect both domestically and internationally and the perception is that the integrity of Treasury might be compromised,” said Godongwana — calling on Zuma’s government to “protect” the Treasury and the Reserve Bank.
It is understood that Zuma’s biggest gripe with Nene was the fact that the former minister was not moving with speed on the nuclear build programme.
In July a frustrated Zuma summoned Nene and Energy Minister Tina Joemat-Pettersson to a meeting, where he demanded answers as to why the nuclear build programme procurement process had not resumed in June as planned.
Zuma made it clear that he was under pressure from the Russians and the Chinese, both bidding for the estimated R1-trillion project.
“The president instructed them to iron out issues between the two departments when they return home,” said a senior government official who was privy to the meeting. The official, who did not wish to be named, said the departments had failed to agree on a way forward — with the Treasury maintaining that the project was “unaffordable”.
The Treasury also proposed that the project be delayed for at least two years and that the number of nuclear power stations be cut from eight to two.
Insiders say a compromise deal was finally approved by the cabinet this week and the plan is to start building the two nuclear plants by 2017. — Additional reporting by Stephan Hofstatter