No-one is under any illusion about how important the confrontation between President Zuma and his finance minister – Pravin Gordhan – is for South Africa.
This looks as if it is turning into a fight to the finish, with Zuma backed by his cronies inside the ANC, while many senior ANC and Communist Party leaders support Gordhan.
Meanwhile, the economy and polity suffers.
Below is a profile of Gordhan by Paul Trewhela (making clear his role in Operation Vula, which Zuma ran) and my own article giving the background to this confrontation, plus the latest from Business Day.
I have also added a useful analysis from Daily Maverick by Ranjeni Munusamy. As she put it:
The ground is starting to shake under Zuma
Pravin Gordhan: A political profile
18 May 2009
There are sound reasons to think that Pravin Gordhan might be politically sympathetic to a more statist economic programme than Trevor Manuel. These relate to his background and political formation. To understand this, it is necessary to know the inter-connections between a number of long-standing activists in the underground resistance to the apartheid regime, of whom Gordhan was one.
The crucial figure is the late Vella Pillay (1923-2004), a central person in the international network of the South African Communist Party and an official in the Bank of China in London for almost five decades, who was born and grew up in Johannesburg. After half a century in exile, Pillay – a founder of the Anti-Apartheid Movement in London – was coordinator in the early 1990s of the Macroeconomic Research Group (Merg), a body of South African economists with a broadly marxist orientation, who compiled a report, Making Democracy Work (December 1993), which proposed a strong state presence in economic policy under a future ANC government.
This report largely guided the ANC’s statist Reconstruction and Development Plan (RDP), which Mbeki rejected and abandoned as ANC government policy in 1996 in a high-handed manner, after minimal consultation within the ANC, the SACP and Cosatu. Mbeki’s repudiation of the RDP and his firm espousal of the market-oriented Growth, Employment and Redistribution Programme (GEAR) was a primary cause of him and his colleagues being increasingly perceived within the ANC as having betrayed the Freedom Charter (1955), which had proposed very extensive nationalisation by the state of the South African economy.
As Mark Gevisser writes in the revised, second edition of his biography of Thabo Mbeki, published this year, Manuel as head of the ANC’s Department of Economic Policy in the early 1990s “quickly became Mbeki’s protege”. Under Mbeki’s tutorship, Gevisser continues, Manuel “wrested ANC economic policy away from a group of illustrious left-wing London academics who advocated for a strong state and inevitable deficit spending…”. (A Legacy of Liberation: Thabo Mbeki and the Future of the South African Dream, Palgrave Macmilan, 2009. p.249) According to Mbeki and his financial managers, GEAR – Manuel’s emergency plan in the 1996 currency crisis – “staved off a crash that would have forced the country to take the begging bowl before the International Monetary Fund and the World Bank.” (p.342)
Vella Pillay – who had managed China’s foreign currency reserves as assistant general manager of the Bank of China in London, and who had been tipped as the first ANC head of the Reserve Bank in South Africa – was the principal individual causualty of this abrupt policy reversal.
Pillay had been perhaps the first member of the SACP to go into exile in London, as early as 1949, when his marriage to a white fellow member of the SACP became illegal under the racist provisions of the Immorality Act of the new National Party regime, followed by study for a degree in international economics at the London School of Economics.
The leading administrator of Soviet relations with the SACP and the ANC, Professor Vladimir Shubin, has written that the “first step in building regular relations between the USSR and the SACP and the Congress Alliance” occurred when Pillay, “the Party’s representative in Western Europe”, visited Moscow in July 1960 together with the SACP leader Dr Yusuf Dadoo, and had meetings at the headquarters of the Soviet Communist Party. (Vladimir Shubin with Marina Traikova,” ‘There is no threat from the Eastern bloc'”, The Road to Democracy, Volume Three, SADET, p.990. (See here – PDF ).
Following further meetings in Moscow, Pillay arranged for Mac Maharaj – subsequently a member of the Central Commmittee of the SACP, senior Umkhonto weSizwe commander and later Minister of Transport in Mandela’s first post-apartheid government – to received military training in the German Democratic Republic in 1961. Maharaj writes in his biography how he became “lifelong friends” with Pillay and his wife, Patsy, and how the Pillay household in London became a “home away from home” for him and other South African exile colleagues in London. (Padraig O’Malley, Shades of Difference: Mac Maharaj and the Struggle for South Africa, Viking, 2007. pp.82,80). Less than a year after his humiliating televised interrrogation before the Hefer Commission, he spoke at Pillay’s funeral in London in August 2004.
Maharaj’s departure from government and his humiliation at the hands of Mbeki’s close associates took place in parallel to Mbeki’s dismissal of Jacob Zuma as Deputy President (2005), the jailing for corruption of Zuma’s financial adviser, Schabir Shaik (2006), and the aborted subsequent prosecutions of Zuma on corruption and rape charges, widely perceived within the ANC to have been instigated by Mbeki.
This is the meaning of Maharaj’s statement, immediately ahead of last months’ elections, that “Within five years of our democracy, a clique coalesced, developed ambitions and set themselves up as kingmakers in politics and business so that they could concentrate and perpetuate power in their hands behind the facade of constitutionalism and democracy.” (Sunday Times, 12 April 2009).
The significant relation of Gordhan to this background is that he, Maharaj, Zuma, retired General Siphiwe Nyanda (former Chief of the South African National Defence Force, and now Minister of Communications in Zuma’s government) as well as Schabir Shaik and two of his brothers were all part of the same underground military-political network, Operation Vula, active mainly in KwaZulu-Natal in the last years of the apartheid regime. While Zuma, based outside South Africa, had been at the head of one strand of Operation Vula, known as “Operation Bible”, Maharaj and Nyanda were both arrested and tortured in South Africa in 1990, and were prosecuted jointly with Gordhan.
Gordhan is reported to have been a member of the Central Committee of the SACP, with links to Zuma from the mid-Seventies, and was secretary of Operation Vula. His connections with Zuma are reported to have begun after Zuma’s release from Robben Island prison in 1973, before he escaped from the country two years later. Gordhan is reported to have been an underground member of the SACP for 20 years.
Given the powerful campaign in the SACP, Cosatu and the ANC against Mbeki’s economic programme before, during and after the recent election campaign, it is reasonable to perceive Gordhan, as Finance Minister, as being in sympathy with the anti-GEAR sentiments of its opponents. This would tend to place him in an adverse relation to Trevor Manuel’s tenure in the same post.
Gordhan’s impressive reputation as head of the South African Revenue Service does not stand in contradiction to this.
Is President Zuma fatally wounded?
The South African president, the country’s economy and even the future stability of the political system, are now in question.
Source: New Statesman
On Tuesday South African President Jacob Zuma faced a no confidence motion in Parliament, brought by the opposition Democratic Alliance. The DA leader, Mmusi Maimane, using unusually inflammatory language, described the president as a “sell-out”, for putting his personal interests above those of the country.
“Jacob Zuma sold out when, as deputy president, he took a R500,000 bribe from Schabir Shaik [his business associate],” Maimane declared. “Jacob Zuma sold out when he manipulated the National Prosecuting Authority to drop charges on 738 counts of corruption, bribery, money laundering and racketeering against him.”
In 2009 the director of public prosecutions dropped the corruption allegations against Zuma, arguing that there had been political interference in the case. This paved the way for Jacob Zuma to become president. The DA argues that the decision not to prosecute was “inherently irrational” and has been patiently attempting to have it reversed. Their challenge is currently before the courts.
While this may be an irritant for the president, it is far from being his major concern: Mr Zuma has tied up legal cases for years, and is likely to use the same tactic once more.
The DA’s no confidence motion was easily defeated. The ANC has an overwhelming majority in parliament and had no intention of allowing the opposition to skewer its leader. But Zuma’s troubles are far from over.
What is really threatening is that Jacob Zuma has lost the backing of key sections of his own party – the ANC – and the small, but still influential South African Communist Party.
The issue that has cost him their support is corruption. There is now an intense battle between the president and his minister of finance, Pravin Gordhan.
President Zuma was forced to recall Gordhan to the ministry in December last year after a disastrous episode in which he appointed a complete unknown (a local mayor who happened to be a Zuma loyalist) to run the South African economy. The result was a run on the Rand, while the value of shares plunged. The South African economy, already threatened by the credit rating agencies with “junk bond” status, looked on the brink of a major reverse.
Zuma met senior business and party leaders who spelled out in no uncertain terms what this would mean. Under intense pressure, Zuma had little option but to ask Gordhan to step in. It now appears that it was the last thing the president wanted.
Max du Preez, one of South Africa’s best-known commentators, has explained why the president was so reluctant. Gordhan had been head of the tax authority – the South African Revenue Service – before his previous stint as finance minister, which ended in 2009.
Gordhan had supervised the compilation of a dossier involving Jacob Zuma. This is said to contain what du Preez describes as “…dynamite allegations of corruption, fraud, front companies and foreign bank accounts against prominent benefactors of President Jacob Zuma.”
A letter was sent, asking the president to comment on the allegations. Faced with this threat, Zuma acted. The tax inspectors who launched the investigation were labelled a “rogue unit” and a new head of the Revenue Service was appointed – another Zuma loyalist.
A crack investigation team (the “Hawks”) recently turned the pressure up on Gordhan. He was presented with a list of 27 questions about his own behaviour. Gwede Mantashe, the ANC secretary-general, leaped to Gordhan’s defence, describing the Hawks letter as “a well-calculated destabilising plan with all the elements of disinformation, falsehoods and exaggerated facts”.
But Gordhan is no slouch. Like Zuma, he is not only a long-time member of the ANC and the Communist Party; he was once in the ANC’s intelligence service.
Aware of just how serious this attack could be, Gordhan upped the ante. Last Friday he threatened to resign as finance minister unless the head of the tax authority was removed. The presidency was forced to issue a statement saying that Gordhan would remain in his post; his job was not in jeopardy.
This game is being played for very high stakes. The South African president, the country’s economy and even the future stability of the political system, are now in question. Allistair Sparks, a veteran journalist, described the ANC as being in a state of “civil war”.
Jacob Zuma is beginning to lose ground. Although he still has plenty of important allies, others are wavering. For the ANC secretary general to come out publicly in support of Gordhan was a blow.
Despite being under pressure, Zuma is not to be underestimated. He was the head of the ANC’s intelligence service, trained by the KGB and east Germans. His network of contacts inside the ANC is unrivalled – particularly among his own ethnic group, the Zulu. He spent years inside jail as a political prisoner, and is determined never to see prison again.
If Jacob Zuma thought he was going down, he might take the temple down with him.
Gordhan holds fast as SARS row rages
Source: Business Day
THE political crisis gripping the government deepened on Wednesday and attitudes hardened as Finance Minister Pravin Gordhan failed to answer questions from the Hawks by the 4pm deadline.
Meanwhile, Police Minister Nathi Nhleko and State Security Minister David Mahlobo came out publicly to justify the investigation by the law enforcement agency into the South African Revenue Service (SARS) and the questioning of Mr Gordhan.
The fight has split both the Cabinet and the African National Congress (ANC) between those who back Mr Gordhan and believe he is being targeted and those who back Mr Zuma and the security establishment in insisting that SARS and Mr Gordhan have a case to answer.
At issue is also whether SARS commissioner Tom Moyane should stay in his job. Mr Gordhan is adamant their working relationship has broken down.
In a letter to Hawks head Lt Gen Mthandazo Ntlemeza on Wednesday, Mr Gordhan’s attorneys said he had not had sufficient time to answer the questions but would do so in due course.
The attorneys also asked: on what authority the Hawks relied in directing questions to the minister; whether any offence was being probed; and, if so, what.
At a press briefing on Wednesday called by Mr Nhleko and Mr Mahlobo to set out the facts around the investigation into the SARS “rogue unit”, Mr Nhleko would not say what charges or offences were being probed.
“It is a strange question to ask what charges are being investigated. A charge is about the final product. One can only formulate charges after an investigation,” Mr Nhleko said.
To ask under what authority or legislation the investigation was being pursued was also “a strange question” as the police operate within the framework of the Constitution, he said.
Mr Nhleko said the Hawks were acting on the basis of a complaint to the South African Police Service laid by Mr Moyane in May last year. Mr Moyane in turn had acted on “information that had come to light” as well as “confessions made by members of the unit”.
Previous investigations into the existence of the unit — such as one by the Sikhakhane Commission — had found prima facie evidence that it was established unlawfully and “may have included rogue behaviour”, he said.
Mr Nhleko also refuted the suggestion made by Mr Gordhan that the questions had coincided with the preparation of the budget and were an attempt to distract him.
“To ask about the timing is a strange question.… This is an on-going investigation, it is not a new thing. The police are involved in an ongoing exercise to send questions to people who may have been there (when the unit was established). That questions are sent do not mean an individual is being investigated or will be charged,” he said.
Mr Mahlobo, who publicly weighed into the matter for the first time on Wednesday, said the inspector-general of intelligence, which has oversight over the intelligence services, had also investigated and concluded that the SARS unit did have an intelligence-gathering capacity.
He provided a detailed list of the R1.6m worth of surveillance equipment the unit had bought, saying that it was only the intelligence services which could authorise possession of such equipment. Mr Gordhan and former deputy commissioner of SARS, Ivan Pillay, have both contended that the unit was established with Cabinet authority.
Mr Nhleko said the veracity of that was still being investigated. More to the point, he said, was that the unit had capabilities reserved for the intelligence services.
Mr Pillay and former head of strategy, risk and planning Peter Richer on Wednesday said Mr Nhleko’s comments were a violation of their rights to dignity and reputation, and that they would seek legal advice. None of the investigations conducted thus far had afforded them an opportunity to defend themselves, they said.
A question of confidence: How secure is President Zuma?
Source: Daily Maverick, 2 March 2016
Predictably, an attempt by the Democratic Alliance (DA) to pass a vote of no confidence in Parliament against President Jacob Zuma failed on Tuesday. The DA apparently believed that they could appeal to the consciences of ANC Members of Parliament to vote in their favour to change the pattern of failed no confidence motions. What the DA seems not to understand is that the issue of confidence in the president is beyond what 400 MPs think but what the sentiment is in ANC structures and in communities across the country. The pressure point is not Parliament, but the heart of the ANC. By RANJENI MUNUSAMY.
DA MPs, including the Leader of the Opposition Mmusi Maimane, drove home the point on Tuesday that throughout the debate on their motion of no confidence against President Jacob Zuma, ANC members could not defend his track record or say why they were confident in his leadership. It is true that the ANC has a serious problem in justifying its support for Zuma at this point in his presidency. But thanks to the DA, it was forced to rally behind and defend the president – albeit awkwardly and unconvincingly.
Though Zuma claims he does not know what the big deal was, his removal of Nhlanhla Nene as finance minister in December cast serious doubt about his leadership and decision-making. While many people have focused on the economic toll of this decision on the country, it is difficult to measure the exact effect this episode had on support levels for the president, particularly in his Cabinet and in his party.
Of course the ANC had to put up the pretence of supporting Zuma at that time, particularly in light of the #ZumaMustFall marches that took place. Like with the DA’s repeated attempts to pass a no-confidence motion against the president in Parliament, the #ZumaMustFall movement had exactly the opposite effect from what it set out to achieve – compelling the ANC to stand by its man.
But Zuma’s U-turn on the Nkandla matter in the Constitutional Court last month made loyalty to the president even more testing. Not only did he demonstrate contempt for the ANC by pulling the surprise move, it led to everyone who came out in support of his disrespect for the Office of the Public Protector look foolish. It was a great lesson for all ANC members on how not to sacrifice their integrity by offering blind support for their leader.
The tipping point, however, has been Zuma’s approach towards Finance Minister Pravin Gordhan, particularly relating to his battle with commissioner of the South African Revenue Service (SARS) Tom Moyane. It is no secret in the ANC that Gordhan had wanted to leave the finance ministry from 2013 but stayed in the position until Zuma appointed a new Cabinet in 2014. The reasons for his unhappiness included the lack of support for the cost cutting measures he had announced in consecutive budgets and the fact that he was undermined in the public sector wage negotiations when a settlement was reached with the unions above what the Treasury had budgeted for.
For Gordhan to return to the finance portfolio in light of the problems he had experienced before could not have been easy for him. He did so in December because he was aware that the country and the ANC needed him to undo the damage Zuma had inflicted and stabilise the economy.
For Gordhan to be undermined again and needled by Zuma and the people he controls just two months later is unsettling for the finance minister, and concerning to everyone observing it. Gordhan has been forthright about his problems with SARS and in a statement on Friday made it clear that there is a surreptitious agenda behind the Hawks’ investigation into the alleged “rogue spy unit”.
The key part of Gordhan’s statement was this: “The letter from the Hawks is an attempt by some individuals who have no interest in South Africa, its future, its economic prospects and the welfare of its people. If necessary, I will take appropriate legal action to protect myself and the National Treasury from whatever elements seeking to discredit me, the institution and its integrity.”
Zuma’s latest statement on the matter sought to give assurance that Gordhan’s position was not in jeopardy. “The media has incorrectly reported, among other things, that there is a war at SARS and that the President and the Minister of Finance are somehow at war. This is a total fabrication and mischievous sensationalism.”
The president’s office also said a process was underway to deal with the “difficulty” in the relationship between Gordhan and Moyane “through the correct channels using the correct legal prescripts”.
“The President began discussions with Minister Gordhan and Mr Moyane on this matter long before the State of the Nation Address and Budget 2016. Measures are being put in place to address the issues responsibly and amicably, for the benefit of all,” the presidency said.
If these processes are underway, why are Gordhan and Moyane still locked in battle? And if this process is effective, why did the ANC secretary general Gwede Mantashe feel the need to speak out publicly in defence of Gordhan?
The question is: Does the ANC trust Zuma?
If this intervention by the president were indeed underway, surely Mantashe would know about it? And if Zuma was mediating between Gordhan and Moyane, why was the SARS commissioner not sitting alongside the minister at the pre-Budget media briefing? Why was Gordhan warning as late as Friday that he is prepared to take legal action to protect himself and the Treasury?
From whom exactly?
Like with Zuma’s explanation about the reason he removed Nene as finance minister, apparently to nominate him to be head of the BRICS bank, nobody can seriously believe that the reports about Gordhan and the Treasury being under pressure from shadowy forces are “a total fabrication and mischievous sensationalism”. The president has made many claims during his presidency including that he had no knowledge of the security upgrades at Nkandla, that he did not know why the Gupta’s jet landed at Waterkloof air force base and that he has no knowledge of his family’s business interests.
While there was a refusal by the ANC to confront the mountain of scandals piling up in front of the Zuma presidency up to now, there are signs of a revolt brewing. Hard questions are being asked by ANC and alliance leaders behind closed doors and sometimes publicly. Party members are not as willing as they were previously to throw themselves into the line of fire to protect Zuma.
The ANC realises that Zuma is a liability; it just does not know what to do about it.
What it will not do, however, is fold and side with the opposition in a parliamentary debate against its own leader. This is what the DA has missed when it decided to go ahead with its motion of no confidence debate in Parliament. Maimane and his colleagues genuinely believed that they had a shot at winning the vote if they excluded ministers and deputy ministers and had a secret ballot. It was a spectacular miscalculation on the part of the DA and shows that they have no other strategy than to keep attempting to convince ANC members to vote with them.
Small Business Development Minister Lindiwe Zulu said during the debate: “The ANC has confidence in President Jacob Zuma. You can shout from the top of your voices but you can’t change that.” Other ANC speakers spoke about Zuma’s contribution to the liberation struggle and the ANC’s history. There was little else they could say to defend the president.
The Economic Freedom Fighters (EFF) sat out the no-confidence debate and did not vote on the motion because they knew it was a foolhardy exercise. They know that another major tipping point is coming when the Constitutional Court rules on the Nkandla matter and this could provide the basis for impeachment.
It is clear that sentiment against the president is changing in the ANC and more and more people are becoming concerned about his conduct and leadership failures. Mantashe has opened a door for others in the ANC to walk through. The ANC is coming to a crossroads but any outside attempt to force them to choose a path will backfire.
The ground is starting to shake under Zuma and by the number of statements he is issuing to explain himself, he is aware that he is not as secure politically as he was a year ago. He has to win back the confidence of the ANC and, after everything he has done to damage the party, that will not be easy.
The end of Zuma’s term as ANC president is already in sight at the party’s 54th national conference in December 2017. Between now and then, the ANC needs to rediscover it soul and find a way to manage Zuma’s exit from power – either speedily or gradually, with the risk of even more damage being done. DM