On the Brink. Claire Bisseker
the Guptas’ Saxonwold compound for seven straight days before his appointment. Various media reports also linked Whitley and Bobat to the Guptas, and they were subsequently accused of having allegedly leaked internal Treasury documents to close associates of the family.5
Besides the political machinations, Nenegate is estimated to have cost the country about R500 billion, including the R95 billion loss suffered on the markets by the Government Employees’ Pension Fund in the immediate aftermath.
‘I was truly overwhelmed and truly, truly humbled by the market reaction because I didn’t expect it,’ said Nene. ‘I still believe that it had everything to do with the National Treasury as an institution, so I didn’t take it personally.’
Nene seems to harbour no anger or bitterness over being dismissed so suddenly without any apparent cause, despite having served the Treasury with distinction for seven years. The accepted narrative behind his dismissal is that he must have drawn a line very firmly in the sand in his dealings with Zuma in the run-up to being axed – perhaps by insisting on fiscal responsibility at technically bankrupt South African Airways (SAA) or by demanding transparency in the costing of the state’s highly controversial 9 600 MW nuclear programme. But Nene doesn’t believe he was fired for being an obstacle or an irritant to the president on either of those issues, or for any other specific act or omission.
He says fiscal discipline was ‘the name of the game’ for the entire time that he served at the National Treasury. ‘The Treasury held the line on everything and said no where it needed to say no. It wouldn’t be correct to say there were things which only affected the president,’ he explained.
‘What I know is that we were on a shoestring budget and it was clear that we had to pursue the fiscal consolidation path with vigour and reduce unnecessary expenditure. That meant we had to park some projects that couldn’t be executed. All of those things might not have gone down well with all of my colleagues. No one was happy,’ said Nene of the run-up to that fateful December day.
This confirms the general perception of society at large that the reason Nene was fired was for doing his job, for insisting on fiscal discipline.
‘Being a finance minister is an impossible task,’ said Professor Emeritus Estian Calitz of Stellenbosch University. ‘It’s a systemic thing because he’s exposed to all the ministers in the cabinet and the job of each minister is to maximise the budget for their department. Unless you have this umbilical cord between the finance minister and the head of government – like we had with Manuel and Mbeki – the finance minister is a very lonely figure.’6
In short, to function successfully, the finance minister has to have the backing of the president. One of the stand-out features of South Africa’s political economy during the Mandela and Mbeki years was the firm support that the country’s macroeconomic policies enjoyed from the top. During Zuma’s first term (2009 to 2014), things continued in very much the same way. However, once growth began to hit the skids during Zuma’s second term, that support began to evaporate.
With the economic slowdown necessitating tough trade-offs to fund new priorities or expand existing programmes, the tighter stance on fiscal policy was becoming increasingly ‘unpalatable’ to the ANC government, explained Fuzile.
‘The success of the National Treasury or the finance minister at times like that depends on continued, unwavering support from the top,’ he added. ‘Instead, there was mild support, mild to cold support, for some of the tough decisions that had to be taken. At best you could say we had limited support from the top and divided support from the rest of the cabinet.’7
It had long been apparent that elements in the ANC were uncomfortable having an economic tsar in the National Treasury who stood above everyone with his hand firmly on the budget. That Nene was forced by the country’s worsening fiscal trajectory to tighten the reins on spending ever more forcefully had clearly made him few friends in the cabinet. The unhappiness this created added fuel to the arguments of those eager to downgrade the position of finance minister, so that the president and his close cabinet allies could drive the budget process instead.
Nene was the first finance minister to be fired by an ANC government since the dawn of democracy in 1994. The timing was also critical, coming just weeks after S&P Global Ratings had changed the outlook on South Africa’s sovereign credit rating to negative. With South Africa already rated BBB– (i.e. on the bottom rung of the investment-grade ladder), it was clear that any further fiscal slippage or deterioration in the country’s institutional strength would be likely to tip South Africa over the edge into junk status.
That Zuma would shoot South Africa in the foot deliberately by placing the rent-seeking interests of his acolytes over the needs of an economy teetering on the brink of a downgrade was deeply worrying. It meant that the president either had no concept of the vulnerable position South Africa was in as a recently downgraded, twin-deficit emerging-market country or that he simply didn’t care. Either way, the sense was that Zuma had well and truly crossed the line.
Under pressure from the markets, banking CEOs and other captains of industry, as well as from within his own party, Zuma back-tracked and by Sunday evening, four days after he had fired Nene, he had reappointed the well-respected Pravin Gordhan (South Africa’s finance minister from 2009 to 2014) to the hot seat.
South Africa had gone through the ignominy of three finance ministers in five days. Van Rooyen lasted little more than a weekend, earning him the unflattering moniker ‘weekend special’.
When the markets opened on Monday morning, the rand started to recover some of its losses but it was subsequently clear that investor confidence in South Africa had taken a severe knock and would not be easily regained.8
Nene’s dismissal had been a rude wake-up call for the investment community, which, until then, hadn’t acknowledged the ‘voracious criminal conspiracy’ that had state spending by the throat, the generalised looting that was occurring, or the fact that South Africa’s democratic project had been hijacked by a Gupta/Zuma/Premier League set of interests, said political analyst Nic Borain.9
At the time, there was speculation that Zuma may have recanted immediately after Nene’s axing and asked him to resume his duties. Nene denied this. He also ruled out the possibility of taking a government job at ministerial level in some future administration. ‘I’ve had my innings. I would really like to retire to my farm.’
When he talks about his farm in Kranskop, the former finance minister becomes boyish and animated. The break from public service has allowed him to reconnect with his family and community. Besides, he is ‘having fun’ in the private sector. As a non-executive director and an advisor at various investment companies, Nene works a four-day week, allowing him to spend more time pulling cabbages and watching those peaceful cows grazing.
Gordhan, on the other hand, had the most torrid year in office after 9/12. Despite his getting off to a flying start at the beginning of 2016, Gordhan’s fate and that of the National Treasury became the epicentre of a high-stakes battle over the heart and soul of the ANC – and the very future of the nation itself.
All this culminated, 15 tumultuous months later, in Zuma’s axing of both Gordhan and Jonas in a midnight cabinet reshuffle, which plunged the country into a fresh crisis in a sickening replay of 9/12.
Why did it happen? ‘Their crime is incorruptibility,’ said Jackson Mthembu, the ANC’s parliamentary chief whip, summing up the situation in one line.10 Indeed, throughout those 15 months, Gordhan and Jonas had held the line on the country’s fiscal position and against a relentless assault on their integrity by state forces.
In his parting press conference at the end of March 2017, Gordhan said to loud cheers: ‘Our souls are not for sale. Our country is not for sale.’
Adversity had turned Gordhan from a grey-suited bureaucrat into the nation’s foremost hero.11 His axing became the rallying point for a broad-based civilian campaign against the unchecked power that the president was wielding on behalf of a rapacious clique.
Tens of thousands of South Africans of all races joined