Political Watch

As things fall apart, Zuma goes into hiding

Country and economy on their knees?
Economy.jpg

South Africa has just come through its worst week since 1994, showing signs of coming apart on many fronts. Meanwhile, its national and governing party leader, President Jacob Zuma, seems to have gone either into hiding or into a type of self-imposed exile abroad.

Just to highlight a view incidents, during the past week we have seen:

  • The open factional warfare within the governing ANC alliance escalating into public statements and the party’s Youth League in Tshwane physically breaking up a media conference of other members of the party, announcing plans for protest actions. They also implied they will use force to stop demonstrators planning to occupy Luthuli House to demand the resignation of Mr Zuma and the whole National Executive Committee;
  • The ANC repudiated a cabinet minister, Mosebenzi Zwane of Mineral Resources, for his statement implying an onslaught on the country’s private financial institutions.       The presidency also distanced itself from the statement, claiming it was made in       his personal capacity, despite him making it in his capacity as chairperson of a cabinet committee and explicitly stating “cabinet had approved recommendations” by his committee,” and that “cabinet has now resolved as follows…”                          The Zwane statement also took a sideswipe at the beleaguered Minister of Finance, Pravin Gordhan, a member of the committee, claiming he did not participate in its meetings.From Mr Zuma personally, however, there was not a single word. He remained unreachable at a meeting of the G20 group of countries in China he is attending, together with Mr Gordhan;
  • At the weekend credible reports had it that the war on the country’s Treasury – the one institution which has stood between the country and a credit downgrade to junk status – is to be intensified by the Zuma network of  patronage and state capture. It is to be stripped of much its powers, notably of control over the state’s procurement system, where tenderpreneurship can flourish if not properly managed;
  • In the meantime, there were clear signs that the financial market has already effectively started factoring in an credit downgrade. The rand started nosediving, touching R15 to the dollar and again becoming the worst-performing currency out of 31 major and developing-nation currencies monitored by Bloomberg;  
  • How difficult and uncertain the situation has become for the private sector, is illustrated by Old Mutual, owner of the local investment managing company (Futuregrowth), which turned its back on some SOEs, distancing itself from the decision. Old Mutual, having a stake in the state-related pension funds business, was probably caught in a position of conflicting interests;
  • One commentator predicted that the rand might be heading for 30 to 40 to the dollar. A credible investment manager we spoke to, predicted that the rand will hit R27 to the dollar by December. Reports also surfaced that Mr Gordhan’s removal could see rating agencies not waiting for December, but immediately cutting their credit rating to junk;
  • Last week also saw a renewed attack on the independence of the South African Reserve Bank (SARB) from the Zuma faction in the ANC, suggesting it was controlled by “monopoly capital”. Truth is that, as previous SARB Governor Tito Mboweni, explained in a statement, the government appoints the SARB Governor with a deciding vote, and nobody may own more than 10 000 shares. On his own 10 000 shares he receives “a fixed dividend, taxable, of R1000.00 a year”. To weaken banking supervision in the country, presently the responsibility of the SARB, would fly directly in the face of international best practice;
  • During the course of the week, Public Enterprises Minister Lynne Brown, instructed Eskom to hand over documents concerning a controversial contract with a Gupta-owned company, Tegeta, to the Treasury, asked for a month ago. Right up to the day before the  instruction, Eskom insisted they have given everything to Treasury. The day after, they delivered the documents to the Treasury;
  • Civil society’s engagement in the “Sars wars” broadened with the Helen Suzman Foundation and Freedom Under Law giving notice that unless the Hawks and National Prosecution Authority give undertakings that Minister Gordhan will not be arrested in relation to any of the alleged charges, and if such charges are to be brought, they will be given at least 20 days’ notice to apply to court for an interdict. Failing such undertakings, FUL and HSF will exercise their rights in law. In their letter they contended that the “administration of justice, the economy and the Republic itself have already been gravely endangered by the Hawks’ and NPA’s actions against the Minister and that the undertakings they seek are urgently required if further calamitous consequences are to be avoided;
  • On the political front the ANC’s governing alliance partner, the South African Communist Party, who played a key role in getting Mr Zuma into his present leadership position, in a statement said the pursuit of Gordhan is an attempt to use judicial means to achieve political ends. Its deputy general secretary, Jeremy Cronin, intimated that Zuma is too powerful in the ANC’s national executive committee (NEC) and in the cabinet; and
  • Crime statistics released last week also reflected a society under economic pressure, with notably crimes like house robberies having gone up. The Police and Prisons Civil Rights Union (Popcru) say the crime statistics released by Police Minister Nkosinathi Nhleko on Friday reflect a social rather than a policing problem. In its statement the union also noted that the majority of prisons were filled with youngsters, which reflects social frustrations like unemployment, poverty and substance abuse. “All of which have been identified as part of the causal factors for aggressive crimes such as armed robbery, house break-ins, theft and murder.”

Commentary

While it is increasingly clear that South Africa is teetering on the brink of implosion, its leader-in-chief, Mr Zuma, has not appeared in public in South Africa for some weeks. He seems to be moving from one destination abroad to another.

In the meantime, and in the absence of strong leadership, his network of ‘deployees’ back home is hard at work, strengthening their grip on the South African state.

And while the dark clouds are gathering, wat does his stand-in, and the man on whom so many South Africans have been pinning their hopes, Deputy President Cyril Ramaphosa, do?

He makes jokes in parliament about noisy condoms!

The crime statistics released last week tell the story of a population under economic and other stresses. Popcru Has hit it on the button with its comments that the stats reflect a social rather than a policing problem.

The inverse relationship between economic performance statistics and that of crime is well documented. As far back as the 1970s, I, then a young crime reporter, wrote an article on the subject.

If the ratings downgrade to junk status does come, and especially early, it will quickly negatively on the poor- and the middle classes. Just imagine what it will do to their shopping basket in the run-up to the Christmas season.

Add to that further job losses and we will not only see crime statistics surge, but will have the classic ingredients for large-scale civil unrest or even a revolution. It is going to take a long time, maybe decades, to repair the damage.

Also read: Unintended consequence 1, country’s future and economy 0; We’ve become a state with no leaders.

by Piet Coetzer

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