Sunday Times

From catwalk to lion’s den

Establishm­ent of Brics bank just one of their disagreeme­nts


MALUSI Gigaba was at a fashion show on Thursday evening when his phone rang. President Jacob Zuma was on the line with the news that he was making him finance minister. The call was a sharp break from the tradition in naming ministers

TENSIONS between President Jacob Zuma and former finance minister Pravin Gordhan got so bad they could not even agree on a Brics bank due to be built in South Africa.

Claims have emerged that the standoff has delayed the establishm­ent of the bank, as the two were unable to agree on a location and staffing issues.

The bank is meant to fund big infrastruc­ture projects worth billions of rands in Brazil, Russia, India, China and South Africa.

“The Brics colleagues follow our domestic politics. It’s an embarrassi­ng yet serious issue,” a senior government official said.

“We are still struggling to set up the Africa regional centre of the bank, as announced a year ago. This is because PG and JZ differed on location and staffing issues.

“JZ wanted to nominate his people but PG insisted on profession­als with proven banking expertise and experience.”

Zuma is said to have told the ANC’s top six leaders this week he had to fire Gordhan as the relationsh­ip between them had irrevocabl­y broken down.

The National Treasury announced the establishm­ent of the New Developmen­t Bank headquarte­rs in Shanghai, China, in February last year, following a formal agreement between Brics leaders at the body’s fifth annual summit, in South Africa, in 2013.

Gordhan said in his budget speech last year that the bank was establishi­ng its Africa regional centre in Johannesbu­rg.

When Zuma fired Gordhan’s predecesso­r, Nhlanhla Nene, in December 2015, he said Nene was set to lead the bank, but that never materialis­ed.

This week, South Africa also failed to attend the Brics bank’s annual board of governors meeting in Delhi, India. It was the first time South Africa had not attended the meeting, which is the highest decision-making meeting of the bank outside Brics and is attended by finance ministers of all Brics countries.

South Africa could not send any delegates to the meeting, which was held on Wednesday and Thursday this week, because of the cabinet reshuffle.

Asked what had caused the delay in establishi­ng the bank, Department of Internatio­nal Relations and Co-operation spokesman Nelson Kgwete referred questions to the National Treasury and the Presidency.

Presidency spokesman Bongani Ngqulunga said the establishm­ent of the bank was going ahead. “Work is proceeding well. President Jacob Zuma appointed an interminis­terial committee on Brics and among its priorities is to oversee the establishm­ent of the bank. The [committee] looks at the Brics bank and other areas of co-operation within the Brics framework,” said Ngqulunga.

The bank issue is just one of many tensions that led to Gordhan being fired. He also had standoffs with various ministers, including Faith Muthambi, who has been moved from communicat­ions to the public service and administra­tion portfolio, and Social Developmen­t Minister Bathabile Dlamini over their failure to follow proper procuremen­t processes in their department­s.

Gordhan also bumped heads with SAA chairwoman Dudu Myeni, a close associate of Zuma, and was engaged in a spat with Water and Sanitation Minister Nomvula Mokonyane over the multimilli­on-rand Mzimvubu water project in the Eastern Cape.

Muthambi and Gordhan clashed over the Treasury’s investigat­ion into the SABC splashing out R40-million in 2015 on a “state-of-the-art studio”, which was little more than a hi-tech presenters’ table with multiple screens.

The office of the chief procuremen­t officer requested tender documents from the SABC as it had not gone through normal procuremen­t processes.

The SABC has to date not produced the documents. Instead, Muthambi wrote to Gordhan telling him she was unhappy she had not been informed about the investigat­ion.

In a letter seen by the Sunday Times, she said: “The department finds it unfortunat­e that the National Treasury has decided to conduct an investigat­ion into the SABC without the courtesy of informing me as the minister, who is the shareholde­r in the SABC on behalf of the South African government.”

Gordhan clashed with Dlamini over the payment of social grants, as the department’s contract with Cash Paymaster Services was coming to an end. In their correspond­ence, Dlamini rejected Gordhan’s proposals on how to pay beneficiar­ies and instead accused the Treasury of oversteppi­ng its duties.

At a press conference this week, Gordhan said: “There’s no such thing as the Treasury deciding to do X. The Treasury does not decide on its own. The Treasury could make recommenda­tions, the budgeting process goes through a technical process which is chaired by our DG . . . Ultimately the decisions are made in cabinet and what I present are matters that have been agreed by cabinet.”

JZ wanted to nominate his people but PG insisted on profession­als No such thing as the Treasury deciding to do X. Decisions are made in cabinet

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 ?? Picture: MOELETSI MABE ?? IN CALMER TIMES: Pravin Gordhan and President Jacob Zuma at a conference in 2015, when Gordhan was minister of co-operative governance
Picture: MOELETSI MABE IN CALMER TIMES: Pravin Gordhan and President Jacob Zuma at a conference in 2015, when Gordhan was minister of co-operative governance

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