On the Brink. Claire Bisseker
step in the execution of President Zuma’s Machiavellian plot. Gordhan learnt that he’d been ejected from the cabinet the same way the rest of the population did – in a televised announcement. Zuma said, with a straight face, that he was making changes to his national executive ‘in order to improve efficiency and effectiveness’.
In the ensuing purge, four other ministers lost their jobs, but the cabinet’s worst performers – Bathabile Dlamini (social development), Faith Muthambi (communications) and Mosebenzi Zwane (mineral resources) – were all retained.
At least Zuma had done Nene the courtesy of informing him face to face that his services would no longer be required and softened the blow with the promise of a job heading up the African Regional Centre of the Brics Bank (though it never materialised). But the way in which Gordhan was abruptly recalled from an international investment roadshow in London four days before being culled seemed designed to inflict the maximum humiliation and distress on the entire delegation. The damage to South Africa’s international standing was incalculable – Gordhan had been meeting 60 foreign investors, representing $2,5 trillion, including BlackRock, Aberdeen, Vanguard and MetLife.
Gordhan said he was never given any reason for his dismissal but the consensus was that Zuma wanted Gordhan removed because of the Treasury’s attempts to stone-wall his nuclear ambitions, Gordhan’s deep antipathy towards SARS commissioner Tom Moyane, and his refusal to lubricate the Guptas’ dealings with local banks, nearly all of which had closed their firms’ accounts.
In advance of the cabinet reshuffle, media outlets were flooded with a laughable intelligence report, entitled Operation Checkmate, which alleged that Gordhan’s international investor trip had really been about mobilising funds to oust the president.
Apparently Zuma is a very good chess player. Some analysts even call him a master strategist. If anyone was checkmated, it was Zuma’s opponents in the ANC. Because although the backlash from every sector of society (including the ANC’s alliance partners, the Congress of South African Trade Unions (Cosatu) and the South African Communist Party (SACP)) was unprecedented, and although South Africa was swiftly downgraded to junk status by S&P and Fitch, the ANC ultimately closed ranks to protect Zuma.
‘He is an expert strategist who for years has been using his superior battle skills to climb to the top and is not planning to descend from the throne any time soon,’ said political analyst Melanie Verwoerd, ‘Patience is his strength, waiting for people to make their moves before he makes his counter-moves. At times it might look as if he is losing the battle or even losing interest, but that is all part of the stealth strategy he uses. And remember the famous laugh? Nothing to do with nervousness, the clever people tell me, he is truly having fun.’34
For Attard Montalto, the failure of the ANC’s NEC to recall Zuma as state president at its meeting in May 2017, not two months after his cabinet reshuffle, was proof that Zuma had ‘total control of the political strategic gameplay that is the ANC’.35 Attard Montalto had consistently warned that investors and the financial markets were underestimating Zuma’s political capital and taking too sanguine a view of political risk in the country.
It was the second time in less than a year that Zuma had withstood a motion brought by NEC members to have him removed from office. The fact that he emerged victorious at a time when the evidence of his being at the heart of a massive conspiracy to capture and loot the state was becoming insurmountable suggested that the president was stronger than many believed.
‘The anti-Zuma crowd are too scared or too compromised or too threatened to speak out,’ said Attard Montalto, noting reports that only 18 NEC members had been in favour of the motion to recall Zuma while 54 had spoken against it.36
In a somewhat sinister turn of events, Zuma was quoted as having warned the NEC at the meeting that he should not be pushed too far and that if people continued criticising him in public ‘they would see [what happens]’.37
Verwoerd sensed that Zuma was planning a political ambush that would thwart his opponents once and for all. If he did launch a counter-attack, what would it look like? ‘I can only guess,’ wrote Verwoerd, ‘but making the country ungovernable, damaging disclosures (truthful or otherwise) about the other side or rigging the elections all seem plausible options.’38
The president had left South Africa in little doubt that he would use his power to advance his own interests and defeat his opponents regardless of the impact this was having on the party, the economy or the country. This fuelled the view that Zuma would ensure Dlamini-Zuma became the next president of the ANC, even if it meant manipulating the election process or, at worst, collapsing the December conference into chaos, to ensure victory for his camp.
A bunch of wild gunmen running amok
It was fast becoming clear that 2017 was going to be the year that would make or break the ANC, and possibly the country as a whole. The forces unleashed by the venal elite centred on Zuma and the Gupta family, culminating in Zuma’s midnight cabinet reshuffle, had driven the nation to the brink. If the country continued on this trajectory, it would most likely inflame civil unrest, split the ANC and, in time, invite a fiscal crisis.
The rating agencies left the country in no doubt: the ousting of Gordhan had imperilled the country’s fiscal and growth prospects. By pulling the rug out from under the Treasury, Zuma had not only halted the fragile recovery that appeared to be taking shape after the end of the drought, but also erased years of fiscal and economic progress. With the stroke of a pen, Zuma had labelled the country as one that placed little value on economic-policy stability, business confidence or the credibility of its Treasury – all ingredients essential to attracting investment.
In fact, S&P’s downgrading of South Africa to junk status (BB+) three days after the reshuffle took the country back 17 years to where it had been in 2000, the year in which it first received an investment-grade rating from the agency.
‘The economy now runs an increased risk of getting stuck in a prolonged period of stagnation as South Africa could increasingly fall off global investor radar screens, given political and policy concerns amid a poorly performing economy,’ said Old Mutual Investments chief economist Rian le Roux. ‘In short, South Africa has dealt itself a serious economic blow, something that may be hard to recover from.’39
Instead of real gross domestic product (GDP) growth heading back above 1% in 2017 in line with the prevailing consensus, the country faced another year of close to zero growth as the reshuffle had annihilated what little remained of investor and business confidence.
The fear was that with Gordhan out of the way, business-friendly reforms would grind to a halt, the financial mismanagement of SOEs would continue unchecked, and the tight reins on fiscal spending would be loosened, leading to more growth-sapping tax hikes and multiple credit-rating downgrades.
The new finance minister, Malusi Gigaba, a former ANC Youth League leader and previous Minister of Home Affairs and before that, of public enterprises, arrived on day one spouting Zuma’s message of radical economic transformation. Gigaba repeated the false narrative, circulated by Zuma’s camp, that the Treasury had been captured by big business (read: ‘white monopoly capital’) and was out of touch with the needs of the people.
‘For too long, there has been a narrative or perception around Treasury, that it belongs primarily and exclusively to “orthodox” economists, big business, powerful interests and international investors,’ said Gigaba. ‘With respect, this is a people’s government.’40
He went on to perpetuate the myth that had been gaining currency in the ANC that South Africa’s economic and fiscal policies had failed to reduce inequality because they were not progressive enough (see the discussion in Chapter 8). There had to be a change in approach, Gigaba said. But, in the same breath, he promised that his new crew was ‘not a bunch of wild gunmen running amok, gung-ho into National Treasury’.41 This unfortunately conjured up precisely the image that he had hoped to avoid and made for spectacular headlines.
However, within a fortnight of his appointment – during which time Fitch had joined S&P and likewise cut the country’s rating to junk status, and Moody’s had put South Africa under