Recall of Zuma vital to avert another downgrade – analyst

A FURTHER credit rating downgrade is on the cards the longer President Jacob Zuma stays in power, political analyst Jakkie Cilliers believes.

Cilliers, chairperson of the Institute of Security Studies’ board of trustees and the group’s head of African futures and innovation, made the assertion in his latest research report, “South Africa’s prospects under Cyril Ramaphosa”.

“The likelihood of a further downgrade by Moody’s will be dramatically reduced with the early recall of Zuma and appointment of a new cabinet, including a new finance minister able to inspire confidence.”

Cilliers also said the recall of Zuma was one of the key decisions now confronting the newly elected national executive committee (NEC) of the ANC.

The top six of the NEC are currently in KwaZulu-Natal, Zuma’s stronghold province, on their first official visit, believed to be part of “behind-closeddoors” discussions regarding Zuma’s recall.

“The longer Zuma stays in power, the better the opposition parties can be expected to do in 2019,” Cilliers added.

However, Cilliers believes that, given the narrow victory of Ramaphosa at the ANC’s 54th national elective conference last month, and the balance of power in the NEC, Zuma may have earned a few months longer as president of South Africa.

Cilliers said Zuma and “his incoherent, large cabinet”, including “inexperienced” Finance Minister Malusi Gigaba, should be recalled sooner rather than later in order to avert a further downgrade of South Africa’s long-term local currency debt ratings.

“With Zuma and Gigaba in their current positions, a downgrade remains highly likely. In fact, shortly after the election of Ramaphosa, Moody’s commented that the new leadership raises the prospect of an improvement in South Africa’s ratings, but warned that ‘the narrow victory limited his ability to implement promised reforms’,” Cilliers said.

Moody’s is the only leading rating agency that has maintained South Africa’s rating above junk status.

Once South Africa’s longterm local currency debt was downgraded by Moody’s, growth would remain constrained for several years and the target of 5% growth by 2023, or of an average growth rate of 5.4% to 2030, as set out by the National Development Plan, was unachievable, Cilliers added.

He lashed out at the ZumaGigaba alliance, saying the announcement only hours before the start of the ANC conference to provide free higher education “clearly demonstrates the risks associated with the irresponsible leadership of Jacob Zuma… and the potential damage he could wreak in the months that lie ahead”.

“Gigaba is out of his depth, demonstrated by a feeble performance earlier on the first day of the conference when the Treasury hosted a business breakfast on the margins of #ANC54,” he said.

In his book Fate of the Nation, published before the December conference, Cilliers plays out three scenarios of South Africa’s fate depending on the outcome at the elective conference. His latest report is built on the back of this book.

In scenario one, titled “Nation Divided”, Cilliers said a win by the traditionalist slate led by Nkosazana Dlamini Zuma would have pushed the ANC below an absolute majority during the 2019 elections and led to the early introduction of competitive politics.

“This is because an #NDZ win would very likely have split the party, resulting in Gauteng being governed by an opposition party,” he said.

Scenario two, titled “Mandela Magic”, that he saw as a clear Ramaphosa faction victory, would have “reinvigorated” the ANC, he said.

Cilliers said a clear Ramaphosa win would have allowed the ANC to cruise to a comfortable majority in 2019 and even allow it to cling on to Gauteng.

But eventually neither of these two scenarios materialised. Instead, scenario three, which Cilliers named after the national soccer team, Bafana Bafana, played out.

“Bafana Bafana”, he said, because for the next few years South Africa would be “muddling along”.

“The brutal factionalism seen during #ANC54 has presented South Africa with a future that is, in many respects, the bumbling-along, talk left walk right governing party that we have seen for many years,” Cilliers said.

Cilliers wants to see new cabinet, finance minister

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