POLITICAL PERCEPTIONS BY CLIVE HATCH – Edition 27 – 12 December 2015

by | Dec 16, 2015 | Political Perceptions


On Wednesday evening President Jacob Zuma committed probably the most irresponsible and economically dangerous act of his presidency and that of the democratic South Africa. This is another clear indication that he puts the interest of himself, his cronies and the ANC above the interests of South Africa.

His decision to remove (fire) Nhlanhla Nene as the Minister of Finance without giving a valid reason is beyond comprehension. The fact that Zuma could not announce a new appointment for Nene only saying that “he was being removed ahead of his appointment to a new strategic position” is a clear indication that this was a hasty and ill thought out decision.

The only obvious reason for his removal appears to be that he was doing his job!

As with all cabinet ministers Nhlanhla Nene took an oath of office that includes “I will be faithful to South Africa ………….. to perform the functions of my office conscientiously and to the best of my ability.’

Without any reasons to the contrary the only reason why Nene could have been fired is because unlike President Zuma, he was upholding his oath of office and doing his job.

It is common knowledge that Nhlanhla Nene was not a puppet of No.1 but rather a professional man held in high esteem both locally and internationally. This respect for the man is evident from the negative reaction by the markets.

What did Nhlanhla Nene do wrong?

Considering that neither Zuma nor the ANC have said otherwise we have to assume that the reasons currently in circulation must be true.

  • It is common knowledge that Nhlanhla Nene sought to reign in excessive government spending which was damaging to Zuma’s plans to loot the treasury to ensure that he, his family and cronies continue living a lifestyle beyond normal means;
  • Nene was known to be skeptical about the whole Nuclear Procurement deal. His insistence that government justify its profitability was causing too much of a blockage for President Zuma in respect of his ‘legacy’ project. This is a project that will open up even greater opportunities for underhand deals than the Arms Procurement deal. Zuma has 738 examples as to how profitable it can be;
  • Thirdly and probably his most fatal issue was not to give into the Chairperson of the SAA Ms Dudu Myeni, a ‘close’ friend of the President who wanted to renegotiate the terms of the Airbus deal through the purchase of SAA Airbuses through mysterious third parties all in the name of transformation – at an additional cost of R388million. Guess who will benefit from this?

Rumours of a romantic relationship between Zuma and Myeni, circulating since the latter’s rise to prominence, were not denied this week. This raises the question of whether the president has used the state-owned airline to provide Myeni with “sheltered” employment despite her allegedly erratic leadership.

A former close associate of Myeni’s was reported in the Mail and Guardian as saying that he accompanied her to Zuma’s official Pretoria residence, Mahlamba Ndlopfu, after 2009. “I used to go with her to the president’s residence and there won’t be any of the wives there … When we got there she would cook for him – she knows what kind of food he likes.”

The former associate, who asked not to be named, said that, although there were no overt displays of affection, “the more we visited the house, the more I saw that this is a relationship … In most cases I left her there. I don’t know what happened afterwards.”

Within days of Nene stating emphatically that he would not permit this deal to go ahead and that he would take action against Myeni and the SAA Board in terms of the PFMA if the deal went ahead he was fired by President Zuma with no reasons given.

The consequences of this irresponsible action:

Zuma quite clearly proved that not only is he unable to read figures but has even less knowledge of economics or the financial system.

The SA Rand reached an all time low of 15.3587 within minutes and by Friday it was trading at R16.05 to the US Dollar, the JSE All Share index dropped and the JSE Bank index dropped to its lowest since October 2014. Yields on local and dollar denominated debt soared as the likelihood of a downgrade to junk spooked investors reaching levels last seen in 2008.

Shortly after his ill conceived decision to fire Nene Zuma was shown on SABC, DSTV channel 404, making a speech in which he said “It is not enough to have political power you have also got to have economic power”

Any illusions that he may have had that by removing the competent and principled Nene from the Finance portfolio and replacing him with a compliant backbench politician were quickly shattered by the markets. South Africa is now on the precipice of a financial collapse and being downgraded to junk status.

This move could force the SA Reserve bank to again increase interest rates at the next meeting of the Monetary Policy Committee (MPC) at the end of January. This time the increase could be a full 1% increase in order to try and stabilise the Rand, to control inflation and ease the balance of payments deficit.

Of course the people who will be hurt the most are the very people that the ANC claim to represent and to look after their interests. The price of all imported commodities will rise including petrol because the Rand has depreciated by far more than the drop in the price of oil.

The cost of major capital projects such as Medupi and Kusile will shoot up and if the ill conceived Nuclear Procurement deal, currently estimated at a cost of R1.3trillion would escalate astronomically.

South Africa could well go into a full blown recession with the concomitant loss of jobs that employment especially among young people completing their degrees and matriculation exams could soar even higher.

Politically this could have dire effects for the ANC in next year’s local government elections.

The new minister of finance:

If the firing of Nhlanhla Nene came as a shock the appointment of the obscure back bencher David Douglas Des van Rooyen, by President Jacob Zuma named as Nene’s successor was an even greater shock announcement.

Economists and commentators have described him as largely unknown, with little policy experience. A search on the internet revealed no reported speeches during his six years in the National Assembly. There are also next to no news articles written on him during his time in Parliament prior to Zuma announcing his appointment.

But according to the ANC, Van Rooyen holds a string of qualifications and has held a number of leadership positions in the ANC from 1994 to 2007. Prior to this he was an MK operative and soldier, and held various leadership positions in Cosas and Khutsong Student Congress. He was also a UDF representative and NUM member.

His list of qualifications are said to include:

  • Advance Business Management Diploma; • Diploma in Municipal Governance, • Certificate in Municipal Governance, • Certificate in Councillor Development, • Certificate in Municipal Finance, • Certificate in Economic & Public Finance and • Masters Degree in Public Development and Management. The ANC reports that the University of London conferred MSc Finance (Economic Policy) to Van Rooyen on July 30 2014. He also recently acquired a certificate in investment analysis and portfolio management from UNISA.

Considering the ANC’s record of people with false qualifications I feel sure that the investigative journalists are all scrounging around to confirm the authenticity of van Rooyen’s reported qualifications.

Prior to this shock appointment he was the Executive Mayor of the small Gauteng municipality of Merafong which he hardly left in a blaze of glory. During his term of office the municipality never received one clean audit; he is now in charge of the country’s finances.

During this period he did show that like Zuma he is a man who places the interests of the ANC above the interest of the voters. It was during this period that the ANC wanted to reallocate Merafong from Gauteng Province to the Province of North West. He supported this decision despite the community opposing it, eventually his house was burnt down and he was redeployed to the National Assembly in 2009. The ANC then reversed its decision and Merafong remains in Gauteng.

After his swearing in on Thursday he first comments were promising if he carries them out. “All economic indicators, as you are all aware, are pointing to the south. Now I must undertake in front of you, and the nation, that I will … ensure every policy is directed at creating favourable investment conditions, leading to the development of South Africa for all South Africans – not for the few,” Van Rooyen said.

His reputation was not enhanced when on Thursday evening the follow tweet was circulated.

I would like to remind all comrades & cadres that we spend in Rands, not dollars. Do not give any attention to the neoliberal exchange rate!”

Van Rooyen’s office has subsequently denied that this is his tweet and alleged it to be a fake.

However the media statement issued by the minister’s office read:

The minister do (sic) not have an official account yet and it is not coincidence that the accounts were created on the day the president announced his appointment‚”

This hardly inspires confidence imagine a letter like that being sent to the World Bank or similar organisation – the mind boggles.

Public reaction:

I doubt if President Zuma could have expected the reaction that this move would attract. Apart from the ANC that released a statement late Wednesday night that “The African National Congress notes and respects the decision of President Jacob Zuma to appoint a new Minister of Finance … The president has exercised his Constitutional prerogative.”

Of course presidential prerogative does not require Zuma to consult on Cabinet appointments”. But on a portfolio so senior and so key to the economic stability of the country, it would be expected that he would consult widely and prepare the ground.

The ANCYL’s middle aged leader Colin Maine showed his clear ignorance of the economy by saying “The “hullabaloo” around the rand falling because of the reshuffle was mischievous. It’s not about Nhlanhla Nene, it’s because of the recession we are in that the economy is not growing… and there are problems with the rand. He might be beautiful to others but he’s not so beautiful that he can make the rand fall.”

Even Cosatu an ANC alliance partner said it was “shocked and disconcerted” by Nene’s removal. The union said that the minister’s tenure was short and problematic since the economic sector does not cope well with abrupt and unqualified changes.”

The SACP has yet to comment; perhaps Blade Nzimande is relieved that #BladeMustFall has now been replaced with #ZumaMustFall.

All the major opposition political parties responded angrily to the announcement.

DA leader Mmusi Maimane said: “President Zuma has made one thing very clear tonight: If you stand in my way as finance minister and seek to introduce fiscal prudence, you will find yourself redeployed and cast aside.”

Economic Freedom Fighter’s (EFF) spokesman Mbuyiseni Ndlozi said: “Nene refused to give South African Airways guarantees and bailout when Zuma’s girlfriend and chairperson of the board requested it.”

United Democratic Movement (UDM) leader Bantu Holomisa also believed Zuma’s relationship with Myeni had a role to play in the axing. “We know Nene was dressed down by this lady in an ANC study group for refusing to bail her out,” he said.

This response was not only limited to the opposition but included prominent ANC loyalist Shaka Sizulu, grandson of legendary ANC leader Walter Sizulu tweetedI’m going be an ass and break ranks with most of my comrades’ public utterances. I don’t agree with last night’s sudden cabinet reshuffle.” He further tweeted that “What I found most disturbing was my org’s statement. It spoke volumes & said nothing. It didn’t welcome it. But didn’t question it either”

Former ANC Gauteng premier Mbhazima Shilowa tweeted on Wednesday: “I know the guy who’s the new Finance Minister. He was a Mayor when I was Premier. He was a disaster hence his removal 2 years ahead of 2011”

Peter Attard Montalto, emerging markets economist at Nomura International, said late on Wednesday the National Treasury’s standing has been eroded by the choice of Nene’s successor.

“In my view, Nene was clearly axed because he failed to do Zuma’s bidding when it came to managing SAA and funding for proposed new nuclear plants,” said Peter Attard Montalto, an economist at Nomura International Plc, from London. Van Rooyen is “a pure political appointment. We are worried about the fact he has no central or provincial government experience.”

On Thursday morning, economist Dr Iraj Abedian said to bring in the inexperienced Van Rooyen to replace Nene was “mind boggling”. It was like changing the captain of a ship in the middle of a storm and replacing him with someone with no experience of the ocean.

Where to now?

By Friday evening Zuma seemed to realise that things were going horribly wrong and the #ZumaMustFall calls were reaching a crescendo to the extent that a very unscientific but yet significant poll carried out by Eusebius McKaiser revealed these results:

If we had a compulsory presidential election today how would you vote?

Jacob Zuma                                        3%

Mmusi Maimane                              56%

Julius Malema                                   19%

Spoilt ballots                                      22%

The Presidency then issued a statement saying:

The appointment of Mr David van Rooyen as Minister of Finance does not signal a change in the government’s fiscal stance. Government will not abandon the fiscal path that we have chosen in the last few years. Maintaining a prudent fiscal position remains one of government’s top priorities. The new Minister will strengthen the path and continue to support all efforts aimed at improving the lives of ordinary South Africans. Minister van Rooyen is supported by Deputy Minister Mcebisi Jonas who carries many years of experience in the economic cluster.

The urgency of the changes in the leadership of the National Treasury was occasioned by the need to send nominations to Shanghai, of the head of the African Regional Centre of the New Development Bank/BRICS Bank, to be based in Johannesburg. Mr Nene is our candidate for this position. We are fully backing his candidature, knowing full well that he will excel and make the nation proud in his next assignment. Government remains committed to adhering to the set expenditure ceiling while maintaining a stable trajectory of our debt portfolio, as set out in the February 2015 Budget.

Quite obviously the President takes all South Africans to be idiots, why could he not have announced it on Wednesday? Surely Nhlanhla Nene would have been consulted about the nomination. Why was it not discussed at the cabinet meeting on Wednesday both Minister in the Presidency Jeff Radebe and Health Minister Aaron Motsoaledi both stated that they knew nothing about the cabinet appointment?

Recently Zuma made a strange appointment as Minister of Mining Mr. Mosebenzi Joseph Zwane bringing in an outsider with strong Gupta connections, now van Rooyen – who is next?

Radebe, Motsoaledi and Naledi Pandor better watch out they could be next. Any cabinet minister who does their job and shows leadership potential is in danger of being redeployed.

So far a petition calling for Zuma to resign has over 100 000 signatures the #ZumaMustFall has gone viral – will the ANC respond, I doubt it – little do they realise the longer he stays the more votes the ANC will lose .Obviously Zuma is misleading them as he does not put the ANC first and South Africa second he puts Zuma Inc first; the ANC second and South Africa third.

 Let us hope that Nhlanhla Nene sticks to his principles and rejects Zuma’s proposed redeployment. A man of his ability can get a top job anywhere in the Financial Industry without having to sacrifice his dignity and integrity.

There can be no doubt #ZumaMustFall!

Until next time,


This newsletter is published by Clive Hatch former Leader of the Opposition in the Mpumalanga Provincial Legislature and former DA Provincial Leader. These views are my personal views and do not represent those of any other person or organisation.

E-Mail:   clive.hatch265@gmail.com

Clive Hatch

About Clive Hatch

Clive Hatch is a political commentator and opinionist. He is a former Member and Leader of the Opposition in the Mpumalanga Provincial Legislature. After matriculating from Jeppe High School for Boys in 1967 Clive Hatch has lived, worked and been involved in the Emalahleni (Witbank) community.

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