by | May 28, 2016 | Political Perceptions

On Monday 9 May South Africans heaved a collective sigh of relief because Moody’s had decided not to downgrade the South African sovereign credit rating to junk status. There was however a minor downgrade from Baa1 to Baa2. The outlook on the rating was changed from stable to negative.

This created a positive exprctation that the pending reviews from the other two rating agencies, Fitch and S&P Global, would also retain the South African Government’s sovereign credit rating above ‘junk status’. Currently both have the country as just one notch above junk status.

Pravin Gordhan was upbeat by the outcome stating “Moody’s report has reminded government of what it should focus on, including building investment confidence to avoid a future downgrade.”

“I am very optimistic that team South Africa approach is one we can extend to the next two rating agencies that are going to come and have a look at our economy and our management of our economy.”

No sooner was there a glimmer of hope at the end of the long dark tunnel and four days later enter President Zuma who once again opened his mouth to change feet.

In his address to the Gauteng ANC provincial general council (PGC) in Irene, Pretoria on Friday 13 May President Jacob Zuma again furiously defended his ill-fated appointment of Des van Rooyen as Finance Minister. He not only defended the appointment but also heaped praise on Van Rooyen, saying “in December last year, I appointed in the Finance Ministry a well-trained cadre of the ANC, Des van Rooyen, in the financial affairs. He was the best candidate to take over the control of the economy”.

These remarks in the same week as Gordhan’s efforts had saved SA from an imminent credit downgrade. During the week it had emerged in Parliament how Van Rooyen’s short-lived appointment cost the country’s economy billions of rand. In his first two of four days in office, the stock market lost R230 billion in value and the bond market R217bn, equivalent to between 10 and 15 percent of the economy.

Zuma took the opportunity to bemoan his ANC comrades for condemning his appointment of “the best candidate”. He said “I was castigated worldwide – including by senior members of the organisation. I then realised I had touched the wrong nerve. I was told I never consulted before making the appointment. I said to myself, Africa my beginning, Africa my ending.”

Not one to shy away from making his blunder a racial issue Zuma said the appointment of Van Rooyen showed that a “black person would suffer until he dies”. The fact that the markets and international economy reacted badly to his firing of Nhlanhla Nene, also a black person did not seem to enter his mind. Race never entered the equation but uncertainty and his lack of understanding of how perceptions effect the markets collapsed the Rand.

This was not the first time Zuma had endorsed Van Rooyen ahead of the incumbent Finance Minister Pravin Gordhan. Previously, Zuma told delegates at the inaugural meeting of the Presidential Press Corps in Pretoria on 22 February 2016

“You know Van Rooyen is my comrade, MK [Umkhontho we Sizwe] for that matter – where I come from. He’s a trained finance and economic comrade, more qualified than any minister I have ever appointed there, in the finance issue.”

Zuma carried on saying “South Africa is the only country in the world which does not control its own economy.”

Not being well versed in economics the President still has not grasped that political uncertainty creates a volatile currency. If he has made some enquiries he would have found out the British Pound (GPB) has also been volatile as a result of the uncertainty arising from pending EU referendum.

He must get rid of his ’persecution complex’ and realise that South Africa is part of the global economy and is subject to the same rules as the rest of the world.

Playing the race card at the expense of the SA economy is the ANC election strategy. On 24 March 2016 Deputy President Ramaphosa promised black business that government would spend billions on broad-based black economic empowerment (BBBEE) in the coming years.

Saying the time of white business monopolies was over. As a neo-socialist party that claims non racialism as a core principle I would have thought that they would have opposed all business monopolies irrespective of colour. But then I suppose what about Ramaphosa and his family?

These claims were refuted by political economist Moeletsi Mbeki, brother of former president Thabo Mbeki who spoke at the Franschhoek Literary Festival on 14 May 2016 and said if one listened to the ruling party, all they heard was that white people controlled the economy and black people were out of it. “The ruling party sees the racial narrative as of benefit to it”.

The FW De Klerk Foundation also countered the statement that the economy is owned and controlled by white people, saying that black South Africans control economic and fiscal policy. Black people control the Reserve Bank and the National Treasury.

They control the state’s 35% share of the economy, they own the 10% represented by the informal sector and, according to the JSE [Johannesburg Stock Exchange], they own a higher percentage of the stock market than whites,” the foundation’s executive director, Dave Steward, said in article on the foundations website.

It is obvious that the ANC is playing the race card in a bid to secure support when he the local government elections and Ramaphosa is also seeking support for when he stands for the position of ANC president at the party’s 2017 national congress instead of doing what is best for the country.

At the beginning of May the Rand/US $ exchange rate was 14.33 by the time Zuma had finished his address to the Gauteng ANC the Rand/US $ was 15.35 but worse was still to come.

South Africans woke up on Sunday morning 15 May 2016 to the headlines in the Sunday Times “Pravin ‘arrest’ shock”.

The article reported that the Hawks wanted Finance Minister Pravin Gordhan to be prosecuted for “espionage” in a case related to the activities of the South African Revenue Service “rogue unit” established while he was the tax agency’s commissioner. The unit has been accused of illegally gathering intelligence and spying on taxpayers.

Insiders at the Hawks and the NPA told the Sunday Times that they were waiting for the “political go-ahead” before acting. Hawks spokesman Hangwani Mulaudzi declined to comment.

However, NPA spokesman Luvuyo Mfaku confirmed that prosecutors were involved in the case. A further concern was that Police Minister Nathi Nhleko’s spokesman Musa Zondi did not respond to queries but referred the Sunday Times to Nhleko. However, Nhleko was not available at the time of going to press.

The report was given further impetus as a result of Zuma’s remarks about van Rooyen on the Friday and the fracas surrounding the incident when the Hawks sent 27 questions to Gordhan regarding his role in the SARS rogue unit in February this year.

Uncertainty was fuelled by speculation of a pending cabinet reshuffle with Brian Molefo, CEO of Eskom, replacing Pravin Gordhan and that Deputy Minister Mcebisi Jonas would be replaced with MP Sfiso Buthelezi who had been secreted into the National Assembly in March this year

Within hours, Zuma’s office issued two statements denying the finance chief was about to be replaced, and noting denials of law enforcement agencies that an arrest was imminentspokesman Bongani Ngqulunga said in an e-mailed statement as follows:
“We have also noted the response of law enforcement agencies which have swiftly denied the rumour. It is clear therefore that the story is the work of dangerous information peddlers who wish to cause confusion and mayhem in the country.

Also on Sunday the Hawks and the National Prosecuting Authority (NPA) denied the pending arrest of Gordhan. Hawks spokesman Brigadier Hangwani Mulaudzi said these were rumours and he would not dignify them with a comment.

NPA spokesman Luvuyo Mfaku said there was no docket on Gordhan.

An important aspect that should not be overlooked is the ANC’s alliance partners the SACP entered the fray saying that Hawks head Lieutenant-General Berning Ntlemeza, an apartheid era detective, was politically motivated in an attempt to arrest the finance minister.

The SACP warned that the use of state institutions to settle political scores would breed anarchy in the country. “Cloning such agendas as if they were the law taking its course, abusing state power to pursue them, is unacceptable,” SACP spokesperson Alex Mashilo said.

But this was not enough the damage was done and the Rand dropped even further to R15.61 to the US $.

No intrigue would be complete without the Gupta’s so enter the Gupta family on Monday 16 May when the Daily Maverick reported

“Members of the Gupta family were back in South Africa last week to deal with their troubled business empire, following the decisions by South Africa’s four big banks to close their accounts. At a meeting in Johannesburg on 6 May, Ajay Gupta allegedly informed people dealing with his family’s companies that the Hawks would soon be making a number of arrests in connection with the SARS spy unit. He said those who would be arrested included Gordhan, Manuel and Pillay”.

On Tuesday 17 May Finance Minister Pravin Gordhan released a statement in response to media reports that he is under investigation by the Hawks and is in danger of imminent arrest.

Gordhan proclaimed his innocence also stating that he had answered the 27questions submitted to him by the Hawks and was not aware of any impending charges. He carried on to say “It is indeed true that no one is above the law. But no one should be subjected to the manipulation of the law and agencies for ulterior motives.”

The investigation centres on an alleged rogue unit operating within SARS. Reports of Gordhan’s arrest were dismissed as being “totally incorrect” by National Prosecuting Authority (NPA) head, Shaun Abrahams on Monday 16 May 2016.

Abrahams would not confirm or deny whether Gordhan is a suspect in the investigation but he did confirm that the NPA had received a docket in connection with the investigation.
Where there is smoke there is fire!

On Thursday 19 May ANC chief whip Jackson Mthembu said that the ANC caucus supported Gordhan, just like it did other ministers in the cabinet. “We don’t appoint ministers in Parliament, but we have every reason to believe in the judgment of Pravin Gordhan”.

On the same day Zizi Kodwa, ANC national spokesperson in Luthuli House dismissed reports that Gordhan was to be arrested and blamed the rumours on forces attempting to undermine government and destabilise the economy ahead of a ratings review next week.

However, SA Institute of Race Relations CEO Frans Cronje suggest that these “forces” may reside within the ANC, rather than being part of external interests, as Kodwa seemed to imply.

By now the Rand had depreciated to R15.88 to the US $. A decline of 10.8% in 17 days.

On Monday 23 May 2016 national director of public prosecutions Shaun Abrahams told reporters in Pretoria “There are no charges of espionage being investigated against Minister Gordhan” He did however add “Neither Abrahams nor the institution required the political go-ahead to decide whether to prosecute or not”.

What must we believe? A week before he said “The NPA is not involved nor is it driving any prosecution in this matter [the Gordhan matter]”. Abrahams would not confirm or deny whether Gordhan is a suspect in the investigation but he did confirm that the NPA had received a docket in connection with the investigation.

Despite denials to the contrary it is worrying that authorities are reportedly waiting for the ‘political go ahead’ before ordering the arrest of the minister and eight other officials to face charges relating to the SARS ‘rogue unit’.”

Does this mean that it could still happen, possibly after the 3 August election?

It is common knowledge that Zuma regards Gordhan as a hindrance to his capture of the State Treasury to enable him to go ahead with the nuclear procurement deal which would be an avenue to further enrich himself and his sycophants.

In March columnist Max du Preez wrote the following about the so called SARS rogue unit:

“Several billions of Rands are at stake and Zuma would be extremely embarrassed if the alleged dossier were to be acted upon. It could well open him up to prosecution himself and/or to a massive income tax bill – at least for evading donations tax.”

The investigations were conducted by the crack SARS investigative unit established during Gordhan’s reign at SARS. SARS actually sent a letter to Zuma’s lawyer asking the president’s response to the allegations. The dossiers were eventually handed to the new SARS commissioner now in a public spat with Gordhan, Tom Moyane.

There is obviously more to this matter than meets the eye, DA Shadow Minister of Finance David Maynier MP suggested that “The only option with any hope of avoiding virtually assured destruction is to appoint a judicial commission of inquiry in terms of section 84 of the Constitution to investigate all the allegations surrounding the so-called SARS ‘rogue unit’”

But is it the truth that President Zuma and the ANC want?

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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