Monday, 9 May 2016

NEWS ANALYSIS: Who’s winning the battle between Zuma and Gordhan?

FIVE months after his appointment, Finance Minister Pravin Gordhan and President Jacob Zuma are in a covert battle.

Mr Zuma and his allies are digging in, bolstering their position wherever possible and popularising the narrative that Mr Zuma and the African National Congress (ANC) are under threat from hostile quarters, both foreign and domestic, and must be protected.

Mr Gordhan too is on the offensive, exercising his authority wherever he can, regardless of how this might antagonise the president.

He also hopes to win the battle of ideas by persuading those he can in the ANC and society that he is a force for good and guardian of good governance and political morality.

But who is winning?

Mr Zuma has the upper hand.
NEWS ANALYSIS: Who’s winning the battle between Zuma and Gordhan?
The state-owned enterprises are a key marker. In February, under pressure, Mr Zuma said that no board of a state enterprise would dictate to government how it should be run. But at South African Airways (SAA), he has blocked Mr Gordhan’s attempts to appoint a new board. The board must be approved by Cabinet and past practice has come to involve securing the president’s assent beforehand.

Mr Zuma still wants his close friend Dudu Myeni on the board. Mr Gordhan refuses. The result is neither a new board nor CE can be appointed. In retaliation, Mr Gordhan refuses to provide SAA with a fresh government guarantee. SAA, therefore, cannot finalise its financial statements for 2015 and crucial items, such as restructuring of debt, cannot be put in place.

To assert himself and step up the fight, Mr Zuma visited the airline on Friday, promising staff he would see to their problems. Ominously, he told them that in the future, he would be "much closer" to what happens at the airline.

There is a similar standoff at Denel. Instead of accepting Mr Gordhan’s authority and backing off from a joint venture that he has implied is illegal, the board has refused to budge. Last week, Mr Gordhan resorted to threats, telling Parliament that the board was "belligerent and arrogant".

There is also a stalemate between the South African Revenue Services (SARS) and Mr Gordhan. Mr Gordhan has asked the president to remove commissioner Tom Moyane. But again, he is being ignored. Mr Moyane is entrenched and continues to restructure SARS in a way that Mr Gordhan opposes.

The comeback from Mr Gordhan is to refuse to sign off on SARS’ annual strategic plan, which had to be tabled in Parliament at the end of last month. Mr Gordhan said "he was not satisfied" with the plan and had sent it back for redrafting.

To make life more difficult for Mr Gordhan, the ANC has reshuffled its parliamentary pack, putting two Zuma allies into the finance portfolio committee, which exercises oversight over Mr Gordhan. Now, he will have to contend with hardliner Pule Mabe, the committee’s new whip, and MP Sfiso Buthelezi, whose arrival at Parliament in March coincided with rumours that he had been put there to replace Deputy Finance Minister Mcebisi Jonas. So where does the fight go next?

It is doubtful that Mr Zuma has given up his designs on controlling the Treasury or the state-owned companies close to his heart. The notion that Treasury officials are in collaboration with white capital is promoted continually.

The latest version of this, drawn by the Gupta company executives at Oakbay, came to light on Friday. It alleges (incorrectly) that Johann Rupert’s Remgro "has a direct interest in all the banks" and that Absa CEO Maria Ramos and former finance minister Trevor Manuel are part of the conspiracy to turn the banks against the Guptas. This plot, it is claimed, is the real state capture orchestrated by white capital and its agents linked to the Treasury.

As weak and irrational as the conspiracy theory is, alarmingly, it has gained traction among officials of the ANC, the Congress of South African Trade Unions and the ANC leagues. The ANC typically needs little persuasion to believe a conspiracy theory, particularly one that involves white capitalists.

While Mr Zuma has the ANC’s national executive committee, much of the Cabinet and the government’s securocrats behind him, Mr Gordhan is gathering a wider spread of supporters from civil society. His alliance with private sector CEOs is potentially important. When confronted by business, Mr Zuma likes to be seen to do the right thing.

With Mr Gordhan boxed in on matters such as the SAA issue, it is possible, although by no means certain, that the CEOs could help put the screws on Mr Zuma and unlock some blockages.

Mr Gordhan’s initiative with business CEOs, who meet with Mr Zuma on Monday, has been given a fresh impetus by Moody’s decision on Friday to hold SA’s sovereign rating steady. Moody’s made it clear that much of its reasoning was based on events linked to Mr Gordhan: his budget and the way that the Treasury fought off Mr Zuma’s hostile takeover in December are key to their thinking.

So, these are a taste of the everyday politics we now find ourselves in. But while it is possible to get a handle on the small battles, SA politics is now moving so fast that it is hard to see where it will end.

With Mr Zuma very much in the driving seat, the country is pulled ever further into dangerous waters, despite the valiant fight by the very dogged Mr Gordhan. Copyright © Africa 24 News. All rights reserved. Distributed by Africa Metro Global Media ( To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, Click Here.

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