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I have been agonising over whether to keep this website going –  or to consign it to the wastelands of the interwebs there to wander mournfully, accumulating lurid advertisements for secret ways of getting rid of belly fat and invitations from young, beautiful and lonely people, in your area, waiting by their phones for a call from you.

After weighing matters too arcane to bore you with here I decided to gird my sagging loins (that’s long and loose clothing, not that other thing you were thinking – Ed) and once more into the breach … and all of that.

So … I have written various 2014 previews. One you may have seen was for the Mail & Guardian and titled ‘What I will be telling investors in 2014′. I would have liked to give it a better edit – and I think I don’t adequately deal with the issue of the corroding effects of the original arms scandal – but you may be interested in reading it anyway. Catch it here.

I also published in early January, as part of BNP Paribas Cadiz Securities’ 2014 Outlook, the overview below. (Thanks, as always, to my main contract holder for generously allowing me to republish a few weeks later here.)

(Remember, no-one has been to the future and returned with any useful information as far as I am aware … so treat the following with a healthy degree of scepticism – Ed)

Political outlook 2014: No safe haven in the storm

Introduction

At least part of our sanguine view of South African politics has rested on the belief that the ANC had several more decades of 60%-plus support at the polls. We were of the view that while this could lead to corruption, complaisance and cronyism, it would also allow the party to keep the country, government and constitution steady while SA undertook a wrenching transformation from its apartheid past to whatever the future held.

However, several important fissures have appeared in the ANC’s support base that suggest this assumption of indefinite ruling party dominance may not be correct and, therefore, that the essentially benign shepherding of that transition is under strain.

Amcu: bridgehead in previously safe African working-class constituency

Firstly, the success of the Amcu (Association of Mineworkers and Construction Union) in the mining (particularly platinum) sector has led to the virtual collapse of a key ANC labour ally, the National Union of Mineworkers (Num). Amcu is important for a number of reasons, but in this section, the issue is that it has created a bridgehead in the ANC’s core constituency that has every possibility of linking up with new left-wing (or in other ways radical) political formations that will challenge the ANC politically in the next few years.

Julius Malema and the formation of the EFF

Secondly, the expulsion of Julius Malema from the ANC and his formation of the Economic Freedom Fighters (EFF) party damages the ANC in two important ways. It draws disaffected young black South Africans, who are experiencing unemployment rates of about 60%, out of the ANC. And it captures ideological terrain that the ANC was previously able to control and finesse, namely, the question of the nationalisation of mines and land.

A strong and confident ANC has, since 1994, essentially been able to tell its electoral constituency that patience is required for transformation and that constituency has, with mutterings, accepted the ANC’s moral authority on the matter. However, that consensus is collapsing. Mr Malema’s ‘red berets’ are attacking the president at every opportunity and arguing that the ANC has sold out the birth-right of Africans and has been bought off by the opportunity to loot the state and by juicy empowerment deals. The message has a natural resonance among poor urban and unemployed youth – but up until Mr Malema’s expulsion, the ANC was able to articulate both sides of this debate within itself.

NUMSA split: The unravelling of the ruling alliance

Thirdly, it appears that the long-standing split within Cosatu (Congress of South African Trade Unions) over its relationship with the ANC has been forced to a head by the suspension of Cosatu Secretary General Zwelinzima Vavi. A ‘left’ faction had, with a degree of discomfort, existed within Cosatu since the formation of the union federation in 1985. This faction has its roots in non-ANC liberation traditions and was concentrated mostly in Cosatu manufacturing unions, especially Numsa. The moves to get rid of Mr Vavi and close down Numsa’s criticism of the president and of ANC economic policy probably emanate from the hegemonic faction within the ANC itself, in other words, Jacob Zuma and his closest allies. Not unsurprisingly, Numsa has now formally called on Cosatu to leave the alliance with the ANC, has said it will not be supporting the ANC in the election in 2014 and has called for the immediate resignation of President Zuma.

Over time, this will impact ANC electoral support, though not necessarily profoundly in 2014. How Numsa members and their dependants vote in next year’s election was probably a ‘done deal’ prior to Numsa’s defection decision at its special congress in late December 2013. Numsa may link up with ‘left’ or ‘workers’ parties (and may actually form a ‘socialist party’ that could challenge the ANC for support in the ANC’s key black working-class constituency), but this will likely impact more profoundly on electoral outcomes in the 2019 election.

ANC swelling in rural conservative areas and shrinking amongst urban sophisticates

Fourthly, the patronage and diversion of state resources as depicted by the Nkandla saga, combined with the vigorous pursuit of the rural vote in Kwazulu-Natal, has meant that the ANC is gradually appealing less to urban Africans (although this is by no means a majority trend) and more to rural and traditional poor black South Africans. This appears to mean that parties like the Democratic Alliance, AgangSA and the EFF are picking up a degree of unexpected traction in such constituencies.

Labour environment

After a catastrophic 2012 as far as the labour environment was concerned – especially the repeated waves of illegal and violent strikes in the platinum sector – 2013 saw stabilisation, albeit at still unacceptably high levels of unrest and strike activity.

In the platinum sector, the Amcu is ‘bedding down’, but likely to continue contesting with the Num in the gold sector. The next public-sector wage round is scheduled for 2015, so we have a breather before that storm hits (and we expected it to be a big storm when it does).

The formalisation of the Numsa split from the alliance probably means that this union will begin to actively contest with the Cosatu unions and in several other sectors of the economy. We are looking for the formation of new and smaller unions in sectors where the incumbent unions have grown too cumbersome or complacent to deal with the demands of specialist groups of workers. Unionism is a growth industry in South Africa, with annuity income for those who set them up. As Cosatu shudders, there are many opportunities emerging.

Labour unrest, poor labour productivity and inflexible labour markets (price, size, skills) are among the biggest negative domestic drivers of economic growth and we expect the figures to show a slight improvement in 2013 over 2012 and a significant deterioration in 2014 and 2015 – which may have significant negative implications along the lines of the BMW ‘disinvestment’ decision.

National Development Plan: The political rise of the Treasury and fall of Cosatu

The ruling party and the ruling alliance’s approach to the National Development Plan (NDP) has appeared highly conflicted since the adoption of the plan at the 2012 Mangaung national conference of the ANC.

While our view is that the NDP is little more than a shopping list (and not the miracle cure some ratings and multilateral agencies hope it is) in the areas of large infrastructure roll-out and a disciplining/training/focusing of the public service, we may be in for upside surprises. The important political leaders to watch here are ministers Lindiwe Sisulu (public service and administration) and Malusi Gigaba (state-owned enterprises).

In several different ways, the Zuma leadership of the ANC has, over the last few months, appeared to back with a degree of fortitude previously orphaned policy thrusts from the NDP that are generally ‘financial-market positive’.

The first of these is the foregrounding of the NDP itself – both at Mangaung, but also in the medium-term budget statement in October 2013. Minister of Finance Pravin Gordhan stated that that this budget statement and all future budget statements would be ‘the accounts’ of the National Development Plan, putting the plan at the centre of government policy.

The trade-union movement – especially the now defecting faction rooted in Numsa, but actually common to the whole federation – was outraged by this, as it sees the NDP as a capitulation by the ANC to (variously) ‘white monopoly capital’, ‘neoliberalism’ or ‘business interests’.

In conjunction with this foregrounding of the NDP, Jacob Zuma has recently signed into law two major policy thrusts that are bitterly opposed by the ANC’s labour ally.

The first of these is the Transport Laws and Related Matters Amendment Act, which allows for the implementation of ‘e-tolling’ on Gauteng highways and has been bitterly opposed by COSATU and other community groups in that province. Bond-market investors and ratings agencies have repeatedly said it is crucial that the ANC implement ‘e-tolling’ if the government is to maintain credibility on the global capital markets. It is significant that the Zuma administration has grasped this nettle, despite facing (by all accounts) a significant electoral challenge in Gauteng in 2014.

The second surprising nettle-grasping activity has been the promulgation of the employment tax incentive bill in the face of united Coatu fury. This is the ‘youth wage subsidy’ of yore, and the ANC under Jacob Zuma has obviously decided to accept thunderous criticism from its ally in the hope that longer-term employment growth benefits will weigh in its favour at the polls, in both 2014 and 2019.

Together, these initiatives are surprising positives and have probably come about because the Treasury has managed to persuade Mr Zuma and his cabinet that failure to take a stand on these various measures could lead to downgrades by the ratings agencies.

Policy and regulatory risks predominate

Thus, our view is that the Presidency, bereft of any real policy direction itself (because it is busy purely with rent seeking and hanging onto power) has been persuaded by Pravin Gordhan that the country is in trouble, that the deficit is looking genuinely threatening, that downgrades are a real possibility and that if this goes south, President Zuma might go with it. The National Treasury briefly has the reins, and this gives us a moment of respite.

However, hostile mining regulations, a fiddly and interventionist Department of Trade and Industry, an overly ambitious Department of Economic Development, a hostile Department of Labour, liquor legislation, more and tighter empowerment legislation and deepening regulations on all fronts, but especially in the credit markets, mean that, on the whole, government in 2014 will be an unreliable financial-market ally.

State finances: The deeper risks are fiscal

The country’s increasing dependence for stability on social grants and other forms of social spending is a real and deepening political risk. While the social grant system has lifted millions of South Africans out of poverty and the public sector has employed hundreds of thousands of others, it has also created a culture of dependency and paternalism and is an unsustainable expense that the government will at some stage be forced to reduce. This is definitely going to be accompanied by severe social turmoil, although as mentioned previously, the real ‘fiscal cliff’ is still some way ahead of the forecast period dealt with in this report.

Election 2014

The election results will be important, but in ways that are difficult to predict.

If the ANC’s share of the national vote plummets to the low 50% range, will this force the party into a process of renewal, or will it be panicked into populist measures? It probably depends on which parties take up the slack.

If the ANC gets 65% of the vote, will it be ‘Nkandla business’ as usual – an unhealthy rural populism à la the Traditional Courts Bill, combined with activities like the significant public resources (ZAR208m) spent on building the president’s Nkandla compound and accusations of corruption?
If Mr Malema’s Economic Freedom Fighters get 10% of the vote, will that mean ANC policymaking is paralysed until 2019 as the party attempts to appease the angry and disenfranchised youth? Will it mean legislation relating to mining and land ownership swerves into uncertain and dangerous territory?

If the Democratic Alliance wins 27% of the national vote (which we think unlikely) and if it is able to form a provincial government in alliance with other parties in Gauteng (which we also think unlikely), how might that cause the ANC to behave? Better? To continue to allow the Treasury to set the tone of probity and effectiveness, concentrate on fixing education and focus on economic growth as the only guarantor of electoral success in 2019? Will this kind of threat cause the ruling party to attempt to make opposition strongholds ungovernable? We suspect different impulses are already at war within the ANC and investors should watch how that battle plays out.

Below, purely as a way of presenting our latest ‘guesstimates’, are our ‘most likely’ electoral outcomes for 2014 (these may change as campaigning performance changes before the election and as various crises emerge, eg, the booing of Jacob Zuma at the FNB Stadium commemoration for Nelson Mandela in December 2013).

votingresultsinpreview

BRICs and the uncertain rise of the SACP

A relatively new and difficult-to-unpick issue is the growing confidence the South African Communist Party (SACP) has in shaping the national agenda. The inappropriate focus on BRICS speakers at the FNB Mandela memorial (over Africans and European Union speakers, with Obama the inevitable exception) is probably evidence of the Communists having very significant influence.

We think this could have fed through into the announced Zuma/Putin ZAR 100bn nuclear deal.

This is a matter of growing tension within the ANC, with a previously dominant (under Mandela and Mbeki) group of ‘progressive Africanists’ having lost power to the Communists, who are now in an alliance with a patronage-seeking, provincial elite with strong links to state-security apparatuses and rent-seeking business interests (‘the Nkandla crew’.)

This struggle could play into succession issues and might be a driver of attempts to impeach Jacob Zuma (a strategy unlikely to succeed, in our view) over the next few years.

Succession and a ‘rescue mission’ in the ANC?

While this matter probably lies beyond the 2014 scope of this report, within the ANC, the possibility of a rescue mission is taking shape (driven, in part, by growing commentary about how many public resources are ending up on and around Jacob Zuma’s person and his tight control of security agencies). A group now on the outskirts of the party, and in very general terms representing the ‘old guard’, appears set to begin working on securing a succession process that reverses the decline (moral and in popularity) over which Jacob Zuma appears to be presiding.

This move has not yet taken shape, nor is it properly manifest, but in our view the important people to watch are previous President Thabo Mbeki, Lindiwe Sisulu, Nkosazana Dlamini Zuma, Cyril Ramaphosa and Zweli Mkhize.

Some of my recent news coverage and commentary:

E-tolling and the DA’s cruel billboards

Last week Jacob Zuma signed into law the Transport Laws and Related Matters Amendment Bill – meaning the unpopular e-tolling can begin on certain Gauteng highways.

I was impressed that the President did the necessary – despite the fact that this will cost the ANC votes in the 2014 poll especially in the closely contested Gauteng and especially amongst the class of people the ANC is, supposedly, at risk of losing to opposition parties.

Of course failure to sign the law might have led to downgrades by rating agencies and an even more hostile report from the IMF … but good for him anyway!

The interesting aside is that last week huge billboards sprung up along those highways saying things like: “E-tolling – Proudly brought to you by the ANC”.

ANC-e-tolls-billboard

Of course that campaign is funded by the Democratic Alliance snapping with its sharp little teeth at the ruling party’s heals .

Or perhaps it is more like being savaged by a duck?

Whatever, it’s all part of the razzmatazz that is going to be seriously tiring in about four months’ time but for the moment is mildly entertaining.

Election 2014 – the Zuma swings and the Zuma roundabouts

The major weeklies continued their faintly mindless coverage of Election2014.

City Press ran with two stories about how the ANC had decided to put Jacob Zuma delivering 50 specific and successful infrastructure projects at the centre of the ruling party’s election campaign. Not quite the shock the screaming headlines claim it to be.

All the Sunday Papers covered the fact that last weekend’s National Executive Committee of the ANC nullified the previous week’s Provincial General Council of the ANC in Gauteng. At issue was that the ANC in Gauteng is clearly not delighted to have to front itself with this particular president and believes its supposedly more urbane, sophisticated urban voters would be better wooed by Thabo Mbeki, Cyril Ramaphosa and/or Kgalema Motlanthe.

Deep behind the chatter is the growing view that the Zuma-face of the ANC is unlikely to charm the middle classes. The basic reasons, according to feisty City Press editor Ferial Haffajee, are made explicit in the Gupta wedding scandal cover-up:

“(it was not) the first time the party has been damaged by our president’s careless ways and friendships, which morph too easily into cronyism and patronage. There is a long line of infractions, stretching from the arms deal and his relationship with Schabir Shaik, to the rape trial he faced (the president was acquitted), the news of a child born out of wedlock with Sonono Khoza, the splurge at Nkandla and the game-playing with the courts around the spy tapes.” (Said the delightful, clever and middle-class Ferial Haffajee in her column in City Press  on 06/10/2013)

The rumour mill is constantly hinting that in certain constituencies the ANC will lose votes because of perceptions about Jacob Zuma’s cronyism and his traditionalist lifestyle choices. The hints usually suggest that the ANC’s own polling information confirm the view.

Frankly it would hardly be a big surprise if certain middle class constituencies are not enamoured with Jacob Zuma. Previous elections strongly indicate that the president is wildly popular in poorer and rural communities, so things are likely to balance out for the ANC.

What would be a surprise is if government got its act together with regard to infrastructure delivery in any meaningful way before Election2014. While a burst of energy can only be a good thing, do not expect a miraculous improvement in infrastructure delivery to result from the ANC’s election campaign.

Microlending falls from favour

Microlending as a business took a number of hits this past week. Nobel Peace Prize winner and founder of the microcredit lender Grameen Bank, Muhammad Yunus, warned that microlending to finance consumption could lock the poor into a life of poverty.

More importantly from a local perspective, Futuregrowth Asset Management’s Andrew Canter was quoted in the Business Times (06/102013) saying the company would “wind down” its exposure to microlenders, including Capitec, African Bank and other unsecured lenders on “moral grounds” (unfortunately the story doesn’t specify if Canter was purely referring to Futuregrowth’s SRI funds – which would be my expectation.) Canter, according to the paper, said: “We have always backed the responsible firms, but the industry structure has provoked industry behaviours that are not good for consumers, or in our view, the nation” … but, he said, Futuregrowth would not make a “panic exit”. “If industry practices improve, or particular players create more sustainable lending products, we will look to back them.”

The microcredit industry has always been controversial and becomes more so when consumers are struggling to make repayments in declining economic conditions. With the link having been drawn between the Marikana tragedy and the extent to which the strikers where in dire straits with regard to loan repayments, it was only a matter of time before sentiment towards the lenders would sour. With sentiment this negative, government is likely to further tighten regulatory control of the sector, especially in an election build-up.

The judiciary – it’s that Jacob Zuma problem again

In a matter almost as impenetrable as it is serious, a judicial tribunal appointed to probe Western Cape Judge President John Hlophe’s alleged attempt to influence two Constitutional Court judges to rule in President Jacob Zuma’s favour when he was fending off serious allegations of corruption got under way last week.

Amongst the complicating factors is that the two judges Hlophe allegedly tried to influence, Chris Jafta and Bess Nkabinde, have indicated they do not wish to proceed with the complaint.

I am not going to pretend to be able to analyse adequately what is going on here. Follow Pierre De Vos at his excellent blog Constitutionally Speaking for all matters relating to politics and the constitution. There is going to be a lot of complex legal argument around this matter but most constitutional experts suggest that the judiciary will be harmed almost no matter the outcome.

The point we unfortunately have to keep uppermost in our minds is that politicians, and especially their machinations in internal struggles within the ruling party, have damaged our systems of law and the institutions that are important to our democracy – from the judiciary, to the prosecutorial authority and including all state sectors directly concerned with national security (including the SAPS, crime intelligence and National Intelligence Service.) And further, such damage continues unabated as powerful groups in the ruling alliance war against each other.

Herewith my latest news update as of 06h30 this morning.

  • NDP – defections to the left and right
  • Collusion scandal in the construction industry gathers momentum
  • Tax Review Committee – some welcome caution
  • Proposed legislative changes in the mining industry shows SA government’s deep ambivalence towards the sector
  • Ramaphosa – rumours that Zuma faction is planning his side-lining
  • Zimbabwe election chaos looms
  • Zanu-PF funding Julius Malema? Good story, but impossible to prove
  • ICT takes its ‘R150-billion’  iron-ore claim to the Constitutional Court

National Development Plan – under attack from left and right

Trade union Solidarity has added its voice to growing (but varied) criticism of the National Development Plan (NDP), calling it “self-contradictory, heavily race-based, deeply interventionist … largely unworkable … downright intrusive and harmful and … likely to require substantial funding”. [1]

Solidarity joins John Kane-Berman (Chief Executive of the South African Institute of Race Relations) who recently said “half-baked solutions suggested by the National Development Plan would do little to address the multiple challenges facing South Africa” and, further, that the plan “is a hotch-potch of contradictory ideas that have not been properly costed and are bound to fail” – Business Day 03/07/13.  Kane-Berman added that the lack of future scenarios for tax revenues, budget deficits or the public debt means that an endorsement of the NDP amounts to giving the government “a blank cheque for more taxation and more borrowing and probably for both” – ibid.

The NDP was adopted by the ANC at its Mangaung conference In December 2012 and has since been repeatedly endorsed as the cornerstone of the government’s medium and long-term planning by Jacob Zuma and members of his cabinet.

Since then the policy has been welcomed by organised business (for being generally market friendly) but strongly criticised by Cosatu for prioritising growth over inequality, employment over ‘quality work’ and for its reliance on markets and the private sector.

So what?

Jacob Zuma’s government has used the NDP to lend an appearance of coherence and co-ordination to policies as diverse as infrastructure development, labour market reform, tax policy, mining regulatory shifts and anti-corruption campaigns. Our own view is (unusually) closer to that articulated in a recent position paper by the South African Communist Party which said that the NDP is “a broad vision open to necessary criticism and engagement. It is NOT really a PLAN, still less a fit-for-implementation plan.”

Government should not be judged on its broad statements of intent – which is essentially what the NDP is. Government should be judged by what it actually does (or fails to do), what legislation it brings to parliament, what structural reforms it affects, the degree to which it improves the public service, how it manages the public purse … and by a host of other performance indicators.


The collusion scandal in the construction sector

Murray and Roberts CEO Henry Lass’s public apology for the company’s involvement in the widespread collusion scandal made the main headline on the front page of the Business Times yesterday. “I know that the Competition Commission’s findings of collusion in the construction sector has angered and disappointed you, just as it has our board, executives, employees, shareholders and other stakeholders,” Lass bemoans. He then goes on to explain that much of the wrongdoing took place in the dim and distant past. “None of the current executives at Murray & Roberts were found to be at fault for any form of collusive conduct through the Fast Track Settlement”.

So what?

It appears that public outrage at the scandal is growing. The lead editorial in the Sunday Times is particularly scathing. Headed: “Jail the price-fixers in the construction sector”, the editorial argues “when the private sector is caught out cheating and inflating costs for everyone who pays tax, we should judge them by the same standards we apply to the likes of Bheki Cele, Dina Pule or Menzi Simelane. Apologists argue that construction companies did this to make the deadline for the World Cup — but it’s a poor argument. It wasn’t just the soccer stadiums that South Africa’s iconic blue-chip companies with suitably self-righteous corporate governance manifests, such as Aveng, Group 5, WBHO and Murray & Roberts, colluded on. There were many others, including the Coega harbour nearly a decade ago, the Nelson Mandela bridge and any number of other construction projects.”

Expect civil claims from various angry customers (including metropolitan governments) … and it is not inconceivable that criminal prosecutions of some executives who didn’t “come clean” in the Competition authority process could still be on the cards.

 

Tax Commission – some welcome caution

Pravin Gordhan has named members of the long promised Tax Review Committee charged with inquiring ‘into the role of the tax system in the promotion of inclusive economic growth, employment creation, development and fiscal sustainability’. Judge Dennis Davis will chair the committee. Other members are Annet Wanyana Oguttu, prof Matthew Lester, prof Ingrid Woolard, Nara Monkam, Tania Ajam, prof Nirupa Padia, and Vuyo Jack – with Cecil Morden, an official from National Treasury and Kosie Louw, an official from the South African Revenue Service as ex-officio members who will provide technical support and advice.)

So what?

It’s an adequate committee staffed and led by people respected across society and (mostly) with the necessary technical expertise. After the ANC adopted policies at its Mangaung national conference in December last year that specifically called for increased taxes in mining (the State Involvement in the Mining Sector document) it is a minor relief that the Treasury has qualified the terms of reference by specifying (amongst other limitations) that the any changes to the mining tax regime must take account of “the challenges facing the mining sector, including low commodity prices, rising costs, falling outputs and declining margins, as well as to its current contribution to tax revenues.”

 

Mining industry legislative changes show ANC ambivalence about the resources sector

The Mail & Guardian published an interesting piece raising important concerns about proposed changes to legislation contained in the Mineral and Petroleum Resources Development Amendment Bill that was tabled in parliament on June 21. According to the author of the article (Peter Leon a partner and head of the ‘mining sector group’ at Johannesburg law firm Webber Wentzel) the bill “perpetuates and, in some respects, exacerbates” excessive administrative discretion in the issuing of mining licences.

In the article, Leon says that the proposed legislation “inexplicably deletes all the Act’s statutorily prescribed timelines and leaves this to ministerial regulation … second, it introduces an export licensing system for ‘designated minerals’, which are vaguely defined as: ‘Such minerals as the minister may designate for beneficiation purposes as and when the need arises in the [Government] Gazette.’ All ‘designated’ minerals will require the written consent of the minerals minister prior to their export.”

Leon points out that under the proposed legislative changes “the minister becomes the pricing tsar for ‘designated’ minerals” and “the department will effectively control all exports of such minerals”.

So what?

Many of the proposed legislative changes Peter Leon discusses in this article are precisely those that were originally contained in the State Involvement in the Mineral Sector document adopted as policy by the African National Congress at it December 2012 National Conference. So, despite various attempts to mollify investors after a torrid 2012 (through, for example, Kgalema Motlanthe’s framework agreement for a sustainable mining and the ‘sensitive’ tax commission terms of reference discussed above) the ANC and its government is still following its contradictory impulses with regards to the resources sector. Expect confusion and contradictory signals to continue to undermine sentiment in the sector.

 

“Fierce ANC Ramaphosa succession battle brews” – Sunday Independent

The Sunday Independent quotes several unnamed sources claiming that there is a campaign in the ANC to prevent the party’s deputy president, Cyril Ramaphosa, from becoming the country’s deputy president after the national election next year. The weekly newspaper claims the fight is “pitting President Jacob Zuma and Ramaphosa’s supporters against each other.” The story suggests that either ANC chairwoman Baleka Mbete or Public Services Minister Lindiwe Sisulu are likely to replace Kgalema Motlanthe in 2014.

So what?

This story is based on the idea that the long term imperative of Jacob Zuma and his lieutenants  is to control the succession in 2017 (in the ANC National Conference which will elect the next ANC president ) and in 2019 (in the national election which will elect the next country president). Why? Because an independently minded candidate (which, in this narrative, Cyril Ramaphosa is imagined to be) might fail to protect Zuma from the consequences of the corruption allegations that still hang over his head. A careful reading of this and similar stories indicates that the “unnamed sources” in favour of ensuring that Ramaphosa becomes deputy president next year are from Gauteng and the “unnamed sourced” plotting against him are from Kwazulu-Natal. Such stories in the popular press are inevitably based on factional leaks out of sections of the party pursuing some or other agenda of their own. This doesn’t mean there isn’t a plot against Cyril Ramaphosa, it just means we need a healthy sense of scepticism about these kind of leaks into the media.

 

Zimbabwe election chaos looms

Zimbabwe is due to host national elections on July 31 – having endured a chaotic ‘special vote’ on July 14 and 15 for approximately 80 000 uniformed personal.

SO what?

The Mail & Guardian put it well:  “every indication is of a poll that will be not only shambolic but also intrinsically unfair. The outcome of the past two elections in Zimbabwe were fiercely disputed and it would be tragic if the result once again left the country in limbo. Equally unacceptable would be a façade of legitimacy over another stolen election.”

(Tony Hawkins, “professor at the University of Zimbabwe’s Clinical Research Centre” gives a useful analysis of the “dismal economic past and the failed policies of President Robert Mugabe and his Zanu-PF party” on the leader page of the Sunday Times. After his analysis – which I recommend here  – Hawkins says “given these statistics and Zimbabwe’s ranking near the top of the list of failed states, it is difficult to understand why South Africa’s chattering classes are so convinced Mugabe will win again next week. His track record of economic failure is unparalleled in any developing country that has not experienced civil war or military adventurism.” While this ‘member of the South African chattering classes’ has no real idea whether Mugabe will win –by hook or by crook – next week’s election, I have to agree with both the Mail and Guardian and Professor Hawkins that it is a foregone conclusion that it will be ‘shambolic’ and ‘intrinsically unfair’.)

 

Bits and pieces

  • Facebook profile, Baba Jukwa, purporting to be a kind of ‘deep throat’ in Zanu-PF has claimed (according to  City Press) that Julius Malema’s Economic Freedom Fighters are funded by key members of Robert Mugabe’s cabinet. “This is ostensibly in revenge against President Jacob Zuma and his international relations adviser, Lindiwe Zulu, who have been heading the Southern African Development Community mediation process in Zimbabwe following the violent 2008 polls” – City Press 21/07/13.
  • Business Times said “rumours are swirling that Cell C has been trying to put together a landmark, cross-sector deal to partner with First National bank (FNB)”.  The story repeats speculation that “(e)ssentially, this would see FNB start its own cellphone business using Cell C’s network as its backbone” with the intention of rolling out integrated cellphone banking to the customer base of both companies  – Business Times.
  •   Imperial Crown Trading and Mineral Resources Minister Susan Shabangu have filed papers at the Constitutional Court, asking it to set aside Pretoria High Court and Supreme Court of Appeal judgments giving Kumba Iron Ore subsidiary Sishen Iron Ore Company (SIOC) full rights to one of the largest iron ore mines in the world. ICT is co-owned by Deputy President Kgalema Motlanthe’s long-time partner, Gugu Mtshali. “At stake for ICT is a 21.4 percent share of the mining right, which is conservatively expected to produce a net profit of R150bn over the next 30 years for its owner” – Sunday Independent.
  • Pali Lehohla, Statistician General and head of StatsSA used some unusual language to describe his feeling about his now retired deputy director general Jairo Arrow as well as now fired chief of Methodology, Evaluation and Standards, Marlize Pistorius – who together identified an 18.1% undercount in Census 2011. Aside from expressing his temptation to “physically manhandle” Arrow, Lehohla also said “we will rid this organisation of those kinds of plotters … you have to act with integrity and flesh, flesh, no blood, no drop of blood must come from the neck … It must be a sword that cuts clean. That’s how we deal with people like these … when you attack you must attack as aggressively to eliminate it completely” (Sunday Independent). Is this what happens when statisticians become generals

[1] Solidarity is a (largely white) South African trade union that mostly organises skilled and semi-professional workers. The criticism of the NDP appear in Solidarity’s latest Labour Market Journal (that can be accessed here.)

Herewith an extract from my weekly news summary and analysis.

The big question of the week was the degree to which Zuma’s Thursday morning briefing helped or hindered our economic decline.

I know I cringed as he was speaking, especially during the twinkly admonishment at the end urging journalists present to report favourably on South Africa. I wanted to shout at the TV and call out to my president (and he is my president, however much I might wish it otherwise): “Don’t be cute! This lot is ready to crucify you – and us – don’t you get it!?”

Well, I didn’t say anything … I have not yet sunk to shouting at the TV, but I do find myself switching channels to avoid those excruciatingly embarrassing moments our politicians seem to bless us with on an ever more regular basis. I am embarrassed at my embarrassment – it is such a childish response, but I find it gets worse not better as I get older.

The fact is I think Zuma’s attempt to talk up mining wage negotiations was the right thing to do. The problem, as others have pointed out, is his credibility is so shot that almost anything he says is dismissed by financial markets and the mass media out of hand.

So herewith, from early Monday morning, my analysis of the previous weeks news:

Rand and GDP growth down – the drivers are complicated, but at least some of this is about politics

Last week the Rand hovered around R10 to the dollar as Stats SA released figures that showed South African GDP had grown an unexpectedly low 0.9 % in the first quarter of 2013 (seasonally adjusted, annualised). Then on Thursday Jacob Zuma held a surprise press conference during which he announced that Deputy President Kgalema Motlanthe, Finance Minister Pravin Gordhan, Mineral Resources Minister Susan Shabangu and Labour Minister Mildred Oliphant would hold talks with parties involved in the coming bargaining season in the mining sector – in the interests of reaching settlements with a minimum of production losses.

During the course of the next forty hours the Rand continued its significant decline and the media, not unexpectedly, busied itself with blaming Zuma’s performance for the country’s economic woes. “Zuma sinks Rand” – The Star, “Rand takes a dive after Zuma pep talk” – Mail & Guardian, “Rand talking cure off to a rocky start” – City Press, “South Africa’s Zuma takes a drubbing for run on rand” – Reuters and “Zuma not only reason for rand fall” –  together these headlines probably give an adequate summary of the media’s take on the week’s economic turmoil.

So what?

Drivers of the price of the ZAR are complex and varied as Business Report (the Sunday Independent’s business section) points out in perhaps the best press economic analysis of the week. Ethel Hazelhurst (Sunday Independent) argues that the rand is primarily being driven by a “cocktail” of uncertainty about US quantitative easing, a continuing slowdown in the Chinese economy, falling commodity prices, a strengthening US dollar and volatility in global markets – and more, that several currency strategists are likely to be recommending ‘buys’ on the rand at this level (which has proved true as the ZAR was at 9.88/$ a few minutes ago). The Sunday Times quotes Finance Minister Pravin Gordhan supporting this view: “We are very confident that the rand will recover in time, that the markets have overreached themselves.”

However, it is my view that the rand’s idiosyncratic behaviour (compared with the basket of currencies from emerging market resource dependent economies) requires further explanation. Traditionally it has been adequate to argue that the ‘idiosyncrasy’ is due to the fact that the rand is particularly liquid and therefore overreacts to more general exits from that group of currencies. However, so called “structural features” that relate to issues as varied as our ‘outlier’ current account deficit, insecurity of the electricity supply, risk of labour unrest and unrealistic labour demands in the mining sector, policy paralysis as a result of the unwieldy ruling alliance, poor governance as a result of preoccupation of political leaders with patronage extraction, corruption, escalating service delivery protests and the permanent risk of instability related to high levels of unemployment and inequality are combining to make for a particularly gloomy South African story at this beginning of winter.

Vavi lives to fight another day

Zwelinzima Vavi, the Cosatu secretary general, has survived the latest attempts to remove him from his position. However an accounting firm will investigate if there was any impropriety in his involvement in the sale ‘the old Cosatu building’ and the purchase of ‘the new Cosatu House’. More importantly there will be various commissions to investigate Vavi’s political loyalties in the light of his failure to adequately articulate Cosatu support for Zuma in the lead-up to Mangaung (Mail & Guardian, City Press, Sunday Times, Sunday Independent and various online news sources … although be cautious, at least some of these outlets have reported factional rumours about Vavi in the past).

So what?

The deep fracture in Cosatu is assuming a clearer ideological and political character with unions clustered around the Num attacking Vavi especially for disloyalty to Zuma and the ANC and unions clustered around Numsa defending Vavi and asserting that his criticism of the ANC leadership for corruption and policy meandering are correct and appropriate. The issues are complex – as I have repeatedly discussed before – but it is probably true to argue that Zwelinzima Vavi and Numsa have become the most significant source of opposition to Zuma’s government and leadership of the party, outweighing even that coming from opposition parties in parliament. No matter what happens with the investigation into Vavi there is likely to be a widespread belief that Vavi is the victim of a ‘stitch up’ (slang for framing someone for a crime or misdemeanour).

National Prosecuting Authority – further evidence of structural negatives

Last week senior state prosecutor Glynnis Breytenbach was cleared of 15 disciplinary charges brought against her by the National Prosecuting Authority. The subtext of all of the coverage in the weeklies is contained in the summary analysis by constitutional expert professor Pierre De Vos: “It will strengthen the increasingly widely held perception that senior NPA leaders are appointed because of their political loyalty to the dominant faction inside the ANC (and especially to President Jacob Zuma and his campaign to stay out of prison) and not because of their personal integrity, independent attitude and ability to act without fear, favour or prejudice (as required by the Constitution)”. The charges against Breytenbach related to her alleged failure to act impartially when she was investigating the Kumba Iron Ore, Arcelor Mittal SA, Sishen and Imperial Crown Trading mining rights issue but was also widely interpreted as motivated by the her insistence on pursuing several other Jacob Zuma allies including suspended crime intelligence boss Richard Mdluli and Nomgcobo Jiba, the person Jacob Zuma has appointed acting head of the NPA.

So what?

Ever since the suspension of Vusi Pikoli, the National Director of Public Prosecutions by Thabo Mbeki in 2007 (probably because Pikoli was pursuing then Mbeki ally Police Commissioner Jackie Selebi on corruption charges) and then his firing by Kgalema Mothlanthe (probably because Pikoli was pursuing corruption charges against newly elected ANC president Jacob Zuma) the National Prosecuting Authority has been in a precipitous state of decline. The institution has been used increasingly as an instrument to favour or retard various factional interests in the ruling alliance and with this has come a predictable decline in its effectiveness. The functioning of the prosecutorial authority is intimately tied up with the functioning of the South African constitution and can become a determining factor in investment decisions. The decline of the NPA should be seen as a not insignificant deterrent to investment in the country.

Bits and pieces

  • Num officials faked stop orders to hide the degree to which it has lost ground to Amcu according to reports in City Press business section. Eight of Num’s full-time shop stewards have been ‘expelled’ by Lonmin due to alleged fraud around union membership. “Full-time shop stewards are employees of the company who do only union work, but receive a salary – usually equivalent to relatively high grade jobs.” Num has until July 15 to regain members or lose its offices at the mine. According to the report the “offices have long doubled as the branch offices of the ANC” – as is the case with the hundreds of Num offices across the country. “Amcu represents roughly 74% of the 18 000 employees and 9 000 contractors at Lonmin” – City Press.
  • Most of the weeklies ran stories about talk show host Dali Tambo’s People of the South television programme due to be broadcast in two halves on state broadcaster SABC last night and Sunday next week.  The show is an intimate and warm interview with Robert Mugabe at home with his family.
  • “Gaddafi billions found in SA” was the lead story in the Sunday Times but over to the right on the front page was the bigger surprise: “It’s official: Pule lied about lover.” The Sunday Times claims it has seen documents that prove Dina Pule, Minister of Communications, has repeatedly lied about her relationship with businessman Phosane Mngqibisa. Failed telecommunications policy is a structural constraint to growth in the country and Pule, who is being investigated by a parliamentary ethics committee about whether she directed business towards Mngqibisa, has proved to be part of the problem. Her removal will come as a welcome relief, but policy uncertainty in the sector is a bigger problem than just this minister.
  • The Sunday Times argues that Cyril Ramaphosa is going to be used to “win support from the middle class and professionals in next year’s election”, while Jacob Zuma “will still be the face of the campaign in working-class communities” – (duh). The weekly has an interesting quote from an ANC leader supporting this assertion: “(w)e realised that the majority of our people love the president, but there are also these negative perceptions about him. What we identified was the issue of his associations, controversies about his children and family using their name to get business and the millions spent in Nkandla … So we will make sure that the DP (Ramaphosa) is visible in campaigns” (my emphasis added). All parties are intensively polling opinions in the electorate in the lead-up to elections and it is refreshing to hear ruling party leaders speak about the obstacles they face with such candour.
  • The Sunday Times also interestingly reports that the national leadership of the ANC is likely to bypass the structures of the party in Gauteng to reach voters in 2014 because the provincial executive (PEC) of the ANC has “not accepted the Mangaung outcome”. This is code for the assertion that the Gauteng ANC does not support the presidency of Jacob Zuma, which certainly squares with the position of the ANC in that province prior to Mangaung.

Early on Monday mornings I send my clients a review of the previous week’s political news which might be of relevance to financial markets.

This morning I thought the issues were of more general interest.

Thus …

Summary:

It is difficult not to see the main items in this review as connected:

  • The ANC yesterday disbanded its Youth League’s executive and the executive of its Limpopo provincial structure – both epicentres of the unsuccessful campaign against Zuma in the lead up to Mangaung;
  • An investigation into Cosatu secretary general Zwelinzima Vavi’s affairs and political loyalties deepens and widens – although, just because it is a stitch-up doesn’t mean there is no fire within the smoke;
  • Zuma’s approval rating among city dwellers drops to an all-time low and disapproval ratings rises to an all-time high.

Main body text:

ANC disbands its Youth League executive soon after axing its Limpopo Provincial Executive Committee

Yesterday, it was reported that at its 4 day legotla [1], the ANC National Executive Committee disbanded, as expected, the Provincial Executive Committee of the party in Limpopo. More surprisingly the NEC of the ANC then went on to axe the NEC of the ANC Youth League – which most observers had thought abased itself adequately to Jacob Zuma after failing to unseat him at the Mangaung national conference. (Note I am reliant on news reports for this … the ANC NEC is due to hold a press conference at 12h00 today where it will give a fuller report.)

So what

The Limpopo ANC and the ANC Youth League were the launching pads of the challenge against Jacob Zuma that had been led by Julius Malema. Disguising itself behind the ‘nationalisation of mines’ call and funding itself through tender abuse in Limpopo the challenge peaked in mid-to-late 2011, just before Julius Malema was suspended. While the leaders of the ANC Youth League were clearly surprised by their axing yesterday, they can probably count themselves lucky that they are not being taken down the same path as their erstwhile leader Julius Malema, which might well end in prison for corruption charges.

While the Limpopo ANC, and to a lesser degree the ANC Youth League NEC, were riddled with corruption, it would be a very generous interpretation of what happened yesterday to see it as a “clean-up” of the ruling party. The  more appropriate prism would be to understand this as an attempt to get rid of centres of resistance to the leadership of Jacob Zuma and the faction he represents. In a less jaundiced view, it is also an attempt to establish a basic degree of coherence in the party before the national elections which will be held midyear 2014.

Cosatu – 3 commissions to investigate Vavi

Zwelinzima Vavi is facing 3 simultaneous commissions into aspects of the criticism that members of Cosatu’s national executive committee made against him two weeks ago – including that he has been involved in corrupt activity and that he is disloyal to the ANC. This comes against the backdrop of ANC secretary general, Gwede Mantashe, attacking Cosatu for failing to defend the ANC against “a neoliberal agenda” and he has warned that anarchy is taking root in Cosatu: “my conclusion is that Cosatu is on a dangerous downward slope” – (Mail & Guardian March 15). (This added after publication – Carol Paton, in her excellent article in Business Day about this matter a few hours ago said: “One of the most distasteful dimensions of Cosatu’s internal fight has been the partial role played by several journalists, who have published information from parties to the conflict designed to smear Vavi. For example, allegations have appeared in the press to the effect that Vavi sold Cosatu’s former headquarters for R10m less than the market price. But such a direct allegation has not been made in a Cosatu meeting.

So what?

The answer is best provided by a quote from “a senior Cosatu leader” in the same article: “All this is a smoke screen. The main cause of divisions in Cosatu is ANC and SACP politics. The two organisations are trying hard to capture Cosatu, but Vavi is the obstacle. He is the only one prepared to defend the interest of workers. Dealing with him will ensure that they capture the federation.”

Not unlike the decision by the ANC NEC to close down internal opposition in Limpopo and in the Youth League, at least part of what is happening in Cosatu is an attempt to close down criticism of Zuma (especially after Vavi called for an investigation into the R230 million state spending on Zuma’s home in Nkandla) and criticism of the ANC more generally. This is the Nkandla faction crushing the last vestiges of the attempts to unseat Zuma at Mangaung – as well as an attempt to establish coherency in the ruling alliance in the lead-up to national elections next year.

(The allegations against Vavi – aside from ‘collusion with opposition’ parties – includes that he sold Cosatu’s old head-office for R10 million less than its market value and that he awarded a tender to a company at which his stepdaughter was employed. Just because there are other agendas at play, says nothing of the veracity or otherwise of these charges. Vavi himself has welcomed the commissions, stating that he believes they will clear him of all charges – although, interestingly, he attempted, unsuccessfully, to have ANC stalwart Pallo Jordan and Minister of Economic Development, Ebrahim Patel as commission leaders.)

(This added after publication: Carol Paton writing in Business Day argued a few hours ago as follows: “One of the most distasteful dimensions of Cosatu’s internal fight has been the partial role played by several journalists, who have published information from parties to the conflict designed to smear Vavi. For example, allegations have appeared in the press to the effect that Vavi sold Cosatu’s former headquarters for R10m less than the market price. But such a direct allegation has not been made in a Cosatu meeting.” I wish I had put that  in earlier.)

 

Zuma approval rating among city dwellers drops to all time low

The Sunday Times reports that President Jacob Zuma’s approval rating among urban dwellers is lower than ever and his disapproval ratings are at their highest – and, in general, views are firming up on this matter.

%

Apr

‘09

Jun

‘09

Sep

‘09

Nov

‘09

Feb

‘10

May

‘10

Sep

‘10

Nov

‘10

Feb

‘11

Mar

‘11

Sep

‘11

O/N

‘11

Feb

‘12

Apr

‘12

Aug

‘12

Feb

‘13

Approve

52

57

53

58

43

51

42

49

49

48

45

55

55

46

48

41

Disapprove

29

13

19

23

41

33

44

34

35

38

41

38

35

46

44

51

Don’t know

19

31

28

12

17

16

15

17

16

14

14

14

10

8

8

9

Net positives

+23

+24

+34

+35

+2

+18

+2

+18

+2

+15

+14

+1

+20

0

+4

-10

Zuma’s approval ratings amongst city dwellers over time (TNS Research)

TNS conducted home interviews with “1290 blacks, 385 whites, 240 coloureds and 115 Indians and Asians.”[2]  54% of black people were still happy with Zuma’s performance, but only 13% of whites. The president still has 64% of the vote from “younger Zulu-speaking adults, of whom 64% – down from 71% in August last year – were happy with his work” (Sunday Times).

An important indicator comes near the end of the story: “Zuma’s biggest drop in approval was recorded in Soweto, where the figure of 42% was the lowest since he assumed office. The Port Elizabeth figure of 22% was also an all-time low.”

So what?

National general elections must be held some time between April and July in 2014. For the first time “born frees” (young people born after 1994) will be eligible to vote. This first wave of born frees will consist of approximately 6 million people, “using the 76% turnout of the 2009 elections, these new voters could make up more than 20% of the vote by 2014 … for context, the Democratic Alliance won 17% of the vote in 2009. From 2014 onward, the born-frees will come in waves of just over 5-million each national election until they make up nearly half of the voting population by 2029” –  (Osiame Molefe in the online news source Daily Maverick).

There is growing excitement that, perhaps, this category of voter, and urban African voters more generally, might be open to political choices unthinkable only a few years ago. Much of the growing expectation in the Democratic Alliance and the energy behind Agang comes from this source. Could younger and urban voters (especially Africans) vote for a party other than the ANC in 2014?

Jacob Zuma has established a rigid hold on the ANC, but the TNS and other market research could indicate that it is precisely this victory that makes the ANC a less appetising choice for younger and urban voters. If Jacob Zuma leads the ANC in an election in which the ruling party gets much less than 60 % of the vote, his hard but brittle hold on the party could shatter.

ANC strategists are seriously worried about both the Eastern Cape (especially, but by no means exclusively, the Nelson Mandela Bay metropolitan area) and the Northern Cape. The idea of whole of the Cape (Western Cape is already in Democratic Alliance hands) in opposition hands and a party the equivalent to the Movement for Democratic Change in Zimbabwe giving the ANC a run for its money in urban areas throughout the country is a nightmare scenario.

Analysts have consistently been surprised at how well the ANC has performed in national elections (62.65% in April 1994, 66.35% in June 1999, 69.69% in April 2004 and 65.90% in April 2009) so treat any wild predictions with a degree of scepticism. However, the TNS survey of Jacob Zuma’s ratings is an indicator that shifts are in progress .

Bits and pieces

  • Business Times quotes a succinct put-down by Finance Minister Pravin Gordhan of the ratings agencies: “[You must] understand that we in South Africa did not create this crisis …when … the financial sector began to create … derivatives, based on sub-prime mortgages … [they] had an AAA rating given to them by the same agencies.” Last week S&P affirmed South Africa’s foreign currency sovereign credit rating at BBB and kept the outlook negative, arguing that external imbalances and underlying social problems remain.
  • All the major weeklies expressed deep levels of concern about what they see as out-of-control police violence in the country – most obviously evinced in the killing of Mozambican taxi driver Emidio Macia in Daveyton, but also brought into public focus by police commissioner Riah Phiyega’s spoon-fed testimony to the Markikana commission on Thursday last week. Police minister Nathi Mthethwa is one of Zuma’s closest allies and his department is, truly, in a parlous and dangerous state.

[1] A word in South African English borrowed from Sesotho, usually meaning a consultation or community meeting with government and the community or within a political party

[2] Categories and language routinely used in South Africa where the racial categorisation of the past is correctly understood to have a significant influence in the present and is routinely used in the media and academic analysis.

Various commentators, politicians and analysts have attempted to characterise Mangaung, to define the moment’s essential nature. Below are two takes I found interesting with some words from me on why I found them thus. After that I include a more general summary of what happened with the voting results for the Top Six and the National Executive Committee.

M&G:  will the scandal prone authoritarian traditionalist and the constitutionalist businessman lick the platter clean together?

Nic Dawes – editor of the doughty Mail & Guardian suggested (on December 21 2012) that Zuma has moved the ANC “dangerously away” from the urban and middle classes and is starting to overtly exhibit rural, patriarchal and authoritarian values inimical to the middle classes. He suggests that Cyril Ramaphosa’s election at Mangaung is (ultimately) an attempt to woo urban and middle class voters back to the ANC – with Zuma having secured traditional and rural support. But, asks Dawes, “can the constitutionalist businessperson avoid contamination by association with a scandal prone, authoritarian traditionalist?”

Good question … except that I am starting to realise that Zuma would never have appointed Ramaphosa if he posed a potential threat in any way at any stage no matter how far they (the Zuma camp) are looking into the future. Ramaphosa is in the house … the Nkandla house … it’s too late for decontamination.

Dawes also makes the useful formulation that Motlanthe’s challenge was a principled attempt to “confront the ANC with the enormity of its Jacob Zuma problem”. I think Dawes is right – or at least that the Motlanthe strategists he spoke to had this conception of what they were up to. However the whole Motlanthe endeavour feels much more like the foolish (but strangely attractive) arrogance of Don Quixote tilting at windmills, or, more tragically, this stupid and noble rush onto heavily defended enemy positions:

Half a league, half a league,
Half a league onward,
All in the valley of Death
Rode the six hundred.

Read the brilliant, awful, manipulative (in my admittedly limited estimation) Tennyson poem and its glorification of cruel and stupid military and administrative incompetence here – ok, glorification of those acting as a result of such incompetence . (You will see from voting patterns at the end of this post that it was closer to 1000 than 600, but aside from that I thought the Tennyson metaphor held up rather well?)

The nationalists, anti-nonracial, populist versus the … who?

If I was on one of those TV or radio programmes that specialise in asking stupid questions right at the end, and I was asked: which South African political analyst do you rate highest? Then “Steven Friedman” is the answer that would most likely trip off my tongue.

With that disclaimer, I am forced to take issue with an aspect of his characterisation of what happened at Mangaung (published in the Business Day – 27/12/12 – here for that link).

Friedman characterises the Anyone But Zuma or Forces For Change (that is the defeated faction at Mangaung) as “the nationalist group, which wants a bigger black share of business … and whose members use radical-sounding language to pursue that goal.” No quibble from me there.

But then Friedman goes on to characterise the group that opposed ‘the nationalists’, that is the group that was victorious at Mangaung, as “a loose alliance stretching from the left to centrist business people who believe the nationalists threaten the ANC’s commitment to nonracialism and are corrupting the movement because they are too close to the wealthy.”

The implicit injunction, one I believe we should resist, is: choose a better devil.

Break it down (and I paraphrase what I imagine the argument would have to entail – and I am taking this much further than is implicit in Friedman’s article, but his argument leads inevitably to this point):

We support both Jacob Zuma (the patriarchal and authoritarian traditionalist with rigid and ruthless control of the security establishment and the ANC – and we support him despite his family and friends having become fabulously wealthy since his winning to high office) and Cyril Ramaphosa (the billionaire ex-unionist who has effectively used the black economic empowerment imperative to accumulate his wealth and will occupy his office with zero power and purely at the beck and call of the Nkandla Crew).

… because …

… they are a whole lot better than the nationalist, anti-nonracial Julius Malema, Tokyo Sexwale, Mathews Phosa, Fikile Mbalula and ANC Youth League?

I think not.

Extract from my summary as of last week

The expected

  1. The leadership and policy results of the African National Congress National Conference was a strongly status quo outcome and a victory for the incumbents (the Zuma camp) and their political and economic policies
  2. The leadership challenge to Zuma (with Kgalema Motlanthe the unwilling champion of that challenge) was routed, as was the policy platform most closely associated with the challengers (the nationalisation of mines). The extent of the victory is clearly and accurately revealed in the leadership election results detailed in Addendum 1.
  3. Cyril Ramaphosa’s election as deputy president has been heralded in much of the financial and popular press as a market-friendly outcome and, in some versions, a salvation of the ANC. It should be pointed out, however, that whatever qualities Ramaphosa possesses (and in my experience he possesses many excellent qualities) these will be exercised as the deputy to an extremely confident and powerful (in party and state terms) president, a president at whose behest Ramaphosa will serve and as a result of whose political influence Ramaphosa was elected. To further dampen any untoward enthusiasm it should be pointed out that Ramaphosa has no base in any constituency within the ANC or within the ruling alliance.
  4. Because the National Conference of the ANC is not the kind of forum in which decisive interventions or radical new directions can be formulated (it takes place over 5 days, has a long and complex agenda, entails many rounds of voting by 4000-plus branch delegates who are often unskilled in policy matters and who are generally organised into large voting blocks by contending factions for leadership) there were no such interventions and (no unexpectedly) new policy directions.
  5. However, the full policy platform of the incumbents, which does entail significant new state intervention in the economy (described and assessed by me in interminable detail elsewhere) was accepted in full (but in a very broad, vague, poorly attended and poorly discussed commission process at the conference.) The ANC is yet to publish the full policy resolution of the conference and I expect it to be a carefully phrased call for more state intervention, but in a language unlikely to alarm financial markets. The details here are important  but I will have to postpone further analysis until the ANC decides it has crafted the resolution carefully enough.

The less expected

  1. Mangaung did only confirm policy and political trends that were already extant – and widely known. However the extent of the dominance of the Zuma camp and the weakness of the challengers took some commentators by surprise – see Addendum 1 for the details of the election results.
  2. The total failure of the political factions aligned to the ANC Youth League to make any impact on the conference policy-making process did come as a surprise to me – I would have thought there would be a rear-guard action around the ‘nationalisation of mines’ call, but none appeared (to me, anyway).
  3. It would have been politic for the Zuma camp to allow some of those who challenged for the top six positions (and their allies) to be represented on the 80 person National Executive Committee. It seems that either the desire to demonstrate total dominance won the day, or the Zuma strategists lost control of the popular mobilisation against the challengers. Either way it leaves a huge internal constituency of the ANC (roughly 25%) without representation at any leadership level within the party – an obviously destabilising outcome. However the Zuma camp is likely to invite some of the excluded individuals back into leadership positions, on terms satisfactory to the victors.

(Post Scrip reminder:  outstanding is the ANC National Conference resolution on policy. The resolution that emerged out of the June Policy Conference took several months to formulate and be published. I do not expect the Mangaung Resolution to take things much further than the resolution from the policy conference. Much of the detail will be dealt with in the New Year and largely in Cabinet and government departments, rather than in party structures.)

Addendum 1

… the results below are culled from various news sources and people who attended the conference (I found the full NEC results at Politicsweb).

A – Voting and results for the top six

(Interesting things to note: Zuma got the least votes of all contested positions and Gwede Mantashe the most – an observation I borrowed from Steven Friedman’s previously discussed Business Day article.)

  • President – Jacob re-elected with 2983 votes to Kgalema Motlanthe’s 991 votes.
  • Deputy President – Cyril Ramaphosa elected with 3018 votes to Mathews Phosa’s 470 and Tokyo Sexwale’s 463.
  • Secretary General – Gwede Mantashe re-elected with 3058 votes to Fikile Mbalula’s 901.
  • Deputy Secretary General – Jessie Duarte elected unopposed.
  • Chairperson – Baleka Mbete re-elected with 3010 votes to Thandi Modise’s 939.
  • Treasurer General – Zweli Mkhize elected with 2988 votes to Paul M Mashatile’s 961.

B – Voting and results for the National Executive Committee

(Note that no challenger to the Zuma camp in the top six election was elected to the National Executive Committee. Note, as well, that the only prominent member of the anti-Zuma camp, Winnie Mandela, just scraped onto the list, having topped the poll for the NEC election at Polokwane in 2007.)

Rank Name Sex Votes
1 Dlamini-Zuma, Nkosazana Clarice F 2921
2 Gigaba, Malusi M 2669
3 Sisulu, Lindiwe F 2658
4 Chabane, Collins M 2585
5 Radebe, Jeff M 2570
6 Pandor, Naledi F 2517
7 Hanekom, Derek M 2497
8 Gordhan, Pravin M 2465
9 Mboweni, Tito M 2463
10 Mthethwa, Nathi M 2450
11 Sisulu, Max Vuyisile M 2442
12 Dlamini, Bathabile Olive F 2423
13 Jordan, Zweledinga Pallo M 2407
14 Nzimande, Blade M 2406
15 Mthembu, Jackson M 2387
16 Ndebele, Joel Sibusiso M 2379
17 Mapisa-Nqakula, Nosiviwe F 2353
18 Motsoaledi, Aaron M 2339
19 Godongwana, Enoch M 2334
20 Kodwa, Zizi M 2306
21 Ebrahim Ebrahim M 2303
22 Dlodlo, Ayanda F 2300
23 Brown, Lynne F 2293
24 Cwele, Siyabonga C M 2245
25 Mokonyane, Nomvula Paula F 2240
26 Mfeketo, Nomaindia F 2228
27 Dlamini, Sidumo Mbongeni M 2213
28 Nxesi, Thulas M 2202
29 Bhengu, Nozabelo Ruth F 2195
30 Nkoana-Mashabane, Maite M 2169
31 Bapela, Obed M 2167
32 Masetlha, Billy Lesedi M 2161
33 Ramatlhodi, Ngoako Abel M 2156
34 Davies, Rob M 2151
35 Motshekga, Angie F 2146
36 Zulu, Lindiwe F 2142
37 Netshitenze, Joel M 2138
38 Nkwinti, Gugile M 2100
39 Joemat-Petterson, Tina F 2076
40 Mabhudafhasi, Rejoice F 2042
41 Shabangu, Susan F 2036
42 Oliphant, Mildred N F 2019
43 van der Merwe, Sue F 1992
44 Capa-Langa, Zoleka Rosemary F 1984
45 Mthembi-Mahanyele, Sankie Dolly F 1930
46 Phaahla, Joe M 1916
47 Skwatsha, Mcebisi M 1888
48 Xasa, Fikile D M 1881
49 Majola, Fikile (Slovo) M 1872
50 Mashamba, Joyce F 1868
51 Tshwete, Pam F 1849
52 Mabe, Sisi F 1823
53 Sizani, Stone M 1803
54 Cele, Bhekokwakhe Hamilton (Bheki) M 1736
55 Magadzi, Dikeledi F 1732
56 Tolashe, Sisisi F 1715
57 Gcabashe, Lungi F 1695
58 Mmemezi, Humphrey M Z M 1679
59 Dlulane, Beauty N F 1674
60 Moloi, Pinky F 1664
61 Mokoto, Pinky F 1644
62 Mashinini, Sam M 1643
63 Zokwana, Senzeni M 1600
64 Mabe, Pule M 1586
65 Yengeni. Tony Sithembiso M 1570
66 Mafu, Nocawe F 1549
67 Mahlobo, David M 1495
68 Mapulane, Philly M 1462
69 Maphatsoe, Kebby M 1456
70 Ntwanambi Nosipho, Dorothy F 1450
71 Semenya, Machwene Rosinah F 1449
72 Segabutla, Miriam F 1403
73 Moloi- Moropa, Joyce C F 1396
74 Molewa, Ednah F 1361
75 Ntombela, Sefora Hixsonia (Sisi) F 1348
76 Manganye, Jane F 1276
77 Letsatsi-Duba, Dipuo F 1057
78 Mtintso, Thenjiwe F 875
79 Mandela, Nomzamo Winfred (Winnie) F 841
80 Didiza, Thoko F 817

(A quick and lightweight aside on a Sunday morning … not part of the ‘deep blue’ series, but bleak enough – I wouldn’t want to disappoint anybody.)

Mandela ailing in the last few days before Mangaung?

Perhaps the universe does have a sense of humour; one that delights in casual cruelties, sneering irony and a deep, dark and impenetrable sarcasm.

Are we facing the death of the universally beloved founder of the (now) great teetering edifice of the South African democracy just as the ANC elects Jacob Zuma for a second term as president?

Just because it is chance and random does not mean that we are not compelled, by out basic humanity, to seek hidden connections and meanings in such coincidence … or rather such impending coincidences.

When the gods smite the earth with earthquakes and floods and drought (as they are regularly wont to do), representatives of those gods have forever and always said through their thin lips: “Well, what do you think? If you behave like this of course he is going to be furious. Bring me a virgin and sharp knife, quickly!”

I can imagine the voluptuaries in the halls  of the African National Congress (or at least those halls that the hoi polloi don’t get to see – where real power is bought and sold and bought again), wiping their plump, greasy hands as they push suddenly away from the laden centenary celebration tables, their sweaty faces shocked, goose liver shiny lips pursed in a meaty sphincter: “oh …. my … god!”

(Yes, yes, I know that in amongst the many thousands of Nkandla beneficiaries (and friends and family), assassins, warlords, desperately confused hoi polloi, drivers of large gleaming cars, meeting-chair-breakers, confused little old ladies who had meant to go to the church next door,  rent-a-crowd members  … and those who are only there for the tshirts and braai, there are several good people fighting the good fight, making famous last stands and that sort of thing. So I obviously don’t mean you have any goose fat to wipe off your faces or that you have plump, grasping little hands … that’s those others, at the top-table – who have spent more on liposuction in the last 5 years than you will earn in your lifetime – no, don’t get up, we know who you are. Glad to have cleared that up.)

The point is that it is going to be impossible not to think of Mandela’s death as some kind of inevitable yin to Mangaung’s yang (it works the other way around too.)

A slaughter of a whole reed dance of virgins will not appease these gods (which are nothing more than our ape brain need to impute narrative to randomness) but might make a few supporters of the Traditional Courts Bill feel pious.

To ridiculously (and messily) extend the religious metaphor: what god would pop snake or stones into our trusting mouths, open to receive meat and bread?

The trickster/Pan/Loki would do precisely that, just as he/she would take Mandela with the one hand and give us the Nkandla legacy cast in military grade bunker cement with the other.

Okay, now I am ready to read the Sunday papers.

Annus horribilis

This has undoubtedly been the worst year for South Africa – at too many levels to name – since 1994. There is much I have wanted to say here but couldn’t find the time.  So I am going to rapidly fire off a series of posts, as my professional duties tail off towards the end of the year.

That probably means potential readers will soon be on holiday and lounging on a beach somewhere.

So let me be cheery to start:

I am positive about South Africa in the medium to long-term … but it’s complicated

My first-case long-term view on South Africa is somewhere between hopeful and good. I don’t think societal outcomes are primarily about the choices made by politicians and their parties – if they (societal outcomes) were (dependent on the choices made by politicians), my view would be significantly more negative.

Instead I think societies change in response to shifts of deep structural features – in themselves and in the ‘global world’ within which the society and country exists. South  Africa – its institutions, politics and economy – is being buffeted by the flood emanating from the unwinding of the distortions of the past, interacting with the ‘flooding-in’ of elements of the global society and economy previously locked out … or previously just less ‘globalised’  as was the case in the world of the 80’s and before.

The most obvious domestic feature of this is the rapid growth of a class of South Africans who have ‘emerged’, settled and accumulated assets. They have done this because they can i.e. as a result of the removal of political and legislative obstacles created by Apartheid. Alternatively they have emerged because such settled and skilled groups are a requirement of newly globally integrated labour and consumer goods’ markets. It works both ways – one as a push the other as a pull. Either way the black middle class is growing and on the move to become the prime determinant of much of what lies ahead for South Africa.

The overwhelming numeric majority of this class is a normal middle-class (public and private sector workers, teachers, artisans, skilled workers and other professionals) previously denied by law and repression the chance of improving their lot (to accumulate assets and get ahead). But along with this classic middle-class has come a slurry of individuals and groups who have more specifically seized the opportunities to extract a rent, opportunities created by the legal and political imperative to transform patterns of ownership and control.  Again, most of these are rational individuals who have seized the legal opportunities that the imperatives for transition have presented them with. However, and this is the important bit, a very large (in terms of accumulated assets and power) part of this group includes those who have successfully harnessed political power with the specific intentions of diverting public resources and/or other resources available for redistribution (the assets of private companies, for example) into their own hands.

The point of all of this is that once through the door, once securely established, that elite, its children, its family networks will attempt to re-establish the basic economic rules that allow for the formal and ordered regulation of property, the appropriate separation between the public and the private and the establishment of the rule of law – an imperative that already characterises the ‘classic middle-class’ that has emerged alongside this elite. In short, once inside the enclosure, the new elite will attempt to lock the door and secure the perimeters. It’s part of normal capitalist development and we will get through it in about 10 – 20 years. Meanwhile we are going through what Karl Marx would have called a form of “primitive accumulation” – with all the attendant threat and chaos.

Once this class has formed, emerged and assumed its central place in South African society – and Census 2012 suggests this is in process – our politics, parties, structures of governance will be forced to adapt to the imperatives of the new underlying configuration. This is the kind of tectonic force that effortlessly shuffles and cuts and pastes our politics and our parties to suit itself.

In 12 years’ time we are going to look around and remark at how surprising it is that South Africa has settled down and become such a productive and cooking hub, that corruption and nepotism has retreated so far and so quickly, that the political certainties of the past have so quickly and radically changed for the better.

Or that’s the outcome I have bet my meager resources on …. and before you follow my lead, remember; there is a reason those resources are as meager as they are.

I am positive about South Africa (or at least about reduced volatility) in the immediate post-Mangaung period

Once the political contest for the presidency is resolved and once the platinum sector strikes settle, the deep uncertainties driven by these interacting cycles will recede.

But that is enough sunshine for now  … because what has driven the intensity of those cycles is still very much present and will feature prominently in the South African investment and operating environment in the next 5 – 10 years, revealing itself in crises at least as serious and awful as the Marikana Massacre and the Mangaung contest. (Much of this will be the subject of the next few “deep blue thoughts” posts.)

Motlanthe or Ramaphosa?

At Mangaung the presidency issue is settled and the only interesting bit (as far as the electoral process is concerned) is the election of the deputy presidency and in the general balance that is achieved within the NEC.

I will leave the NEC for a later discussion.

I think the Zuma camp is entirely in control of the president/deputy choice, so when we analyse what might happen we have to ask: what is the imperative of the Zuma camp?

Well, that’s an easy one: stay out of prison after you have left office and keep your loot forever. That’s the thing and the whole of the thing.

So which deputy choice could better ensure this outcome?

Would a President Ramaphosa eventually, following the logic of the Constitution and the law, and impelled by some hope for his own legacy, end up allowing Zuma to be sent to prison?

Would Motlanthe?

I think Ramaphosa might. I would have trusted the younger version to do the right thing a lot more than I do this older one. This man has done a lot of complex dealing with “the cold realities”, he has supped with with a Dark Lord or two along the way  … and I would not feel entirely confident that the Zuma camp could not construct a deal that keeps him (Ramaphosa) beholden until long after Nkandla Incorporated has broken free of the threat of justice and been laundered till it shines like a blue chip.

And Motlanthe?  I am grinding my way through “Kgalema Motlanthe: A Political Biography” by Ebrahim Harvey (there’s more than one medicine measure of hagiography in there, but despite that I am starting to believe that KM might just be a seriously good person). However, I don’t think that means he would send Zuma to jail. He seems like a man who hates having to take decisions that “divide the house”. Taking down Nkandla is going to require something even more invasive and destructive than Polokwane. I cannot see Motlanthe as the author of such a story.

It would be a relatively easy matter for the Zuma camp to claim the imperative of unity, and decide to accept Motlanthe back into the fold – instead of Ramaphosa – and therefore as the successor president in 2017.

Enough for now.

I am not encouraged, in my professional life, to be too colourful in what I write or say.

This morning I reviewed the weeklies – as I do before 06h30 every Monday morning – and found myself having to strip more metaphor and vitriol than usual from what I had to say.

For example – still right here in my clipboard, recently cut from the document I sent to clients – is this little piece of over-the-top contemptuous bitterness: “it paints a picture of an engorged elite sitting atop piles of treasure they will defend at all and any cost.”

I remember vaguely from 04h00 this morning a picture lurking somewhere in my head: there are about fifty fat dragons uncomfortably sprawled over their separate piles of loot in a disgusting, dank cave somewhere far below the smoking and ravaged surface. These beasts are  dangerously fanged in a mean, cowardly way and entirely without the pretty iridescence of most dragons I have encountered – and they hate and fear each other and anyone else who might take their stuff …

… but obviously I never went down that route.

Last Friday’s Mail & Guardian had particularly excellent – and depressing – stories about the the Nkandla looting. See here for the memorable editorial that sums up the ugly story; here for the alleged Maharaj arms deal link, here for the Gupta’s further bankrolling of the Zumas’ excessive domestic costs … and here, from the Sunday Times, a clear view of how significant public funds were diverted to the Zuma coffers and asset base, but also that much of that money did not actually arrive because it was creamed off by cronies before it even got spent on the Zuma friends and family.

The point, I think, is that the African National Congress is fast resembling sets of competing patronage networks – and little else. This is revealed in the violence and vigour in its internal contests for position. There is zero evidence of ideological division; all claims to the contrary, to my mind, are, sadly, often revealed to be false fronts: sheep’s clothing for wolves trying to sneak up on their prey.

Anyway, if it is all too exhausting and depressing to read in the original here is an extract from my morning summary:

  • The ANC nomination process draws to a chaotic and sometimes violent close – with Jacob Zuma achieving something of a Pyrrhic victory
  • Out of this might come one result welcomed by financial markets: the election of Cyril Ramaphosa as Zuma’s deputy and, hence, his (almost) automatic rise to the presidency in 2017
  • The body of the news commentary was a painful forensic tracking of the corrosive flood of money pouring over the ruling family from some worrying sources
  • The Gold Fields’ unbundling was portrayed as a straightforward vote of no-confidence in the country and its leadership – despite the clear and coherent denials by the company itself
  • The death of two much loved and respected South Africans seemed to increase the anxiety about the present and the future

ANC nominations close

City Press counts 2,256 implied votes for Zuma (slightly more than 2,251 he needs to win at Mangaung) emerging out of the nomination process. Table 1 below is what we get as a running total,  including the Leagues. (Note: the votes are ‘implicit’ from the nominations;  where branches-nominated candidates at the provincial conferences we have made the fairly safe assumption that most of these branches would vote for that candidate at the National Conference in December.)

Table 1: Zuma has it – and the 986 outstanding from Limpopo, Western Cape and Northwest is not enough to make a difference

Province/League Zuma Motlanthe
Eastern Cape 392 211
Northern Cape 160 23
Limpopo Conference delayed – violence etc.
Western Cape Conference delayed – disputes etc.
Mpumalanga 427 17
Free State 249 0
Northwest Conference delayed – shots fired etc.
Gauteng 173 238
KwazuluNatal 856 0
Women’s League 45 0
Youth League 45
Veterans league 45 0
  2307 538

So what?

Nothing much. It is going as expected – ever since the Julius Malema campaign was defanged with him (Malema) facing gradually escalating criminal charges related to his alleged ‘tenderpreneurial’ activities it was all over for the Anything But Zumas (ABZs). The interesting dynamics are in the side-lines, with the Zuma camp having backed Cyril Ramaphosa for deputy – partly because their first choice, Kgalema Motlanthe, refused to say he wouldn’t stand against Zuma for president and refused to campaign as part of any slate. Motlanthe’s meticulously principled position may get its just rewards in the fullness of time, but for now he seems to have abandoned the field to those with no qualms  about the tactics they use to secure the ever richer prizes that come with controlling the ANC patronage network.

 

Nkandla, Gupta, Duduzane, arms deal, Maharaj, Mrs Bongi  Ngema-Zuma and Baroda Bank

If anyone was wondering why the ANC battle for power is so intense and bloody, at least one major set of explanations can be found in the incredibly complex (and rich) web of transactions between those at the centre of power and various groups and companies that flood money towards them – presumably because they are such a good investment.

Headlines like: “Zuma’s Home Economics 2 – Guptas ‘bankroll’ wife’s mansion”, “Did arms firm pay Mac’s bill?” ,  “Living in the lap of luxury”, “Bankrolling their way to the top” and “Private deals that demand scrutiny” (Mail and Guardian); “Nkandla: who will take the fall?”, “Joemat-Pettersson flew back for Zuma’s wedding (at R400 000 cost to taxpayer)” (City Press); “Millions stolen from ANC Elders’ (Sunday Independent)  … and just too many more to list here.

So What? The fact that weekly, the tone and intensity of the popular press is becoming more explicitly accusatory of those within the financial web around the Zuma family, and that there has been no significant attempt by those accused of very considerable impropriety to defend themselves has, to my mind, two possible explanations. The first is that the accusations are so overblown, inaccurate and sensationalist that the Zuma family, the presidency, the Gupta family and Mac Maharaj (among a host of implicated others) expect the accusers to choke on their own excess and overstatement. The other possibility is the Zuma camp learned during its effective defence against a myriad corruption, bribery and money laundering allegations that if they can hold out long enough the prosecuting authority will eventually be forced to back off – or be replaced by new prosecutors.

“Gold Fields: who is next?” (Business Times) versus “We will not follow split” (Business Report)

The weeklies were full of anxiety about Gold Fields’ unbundling of some of its local assets – and concern that this might be the start of a wave of similar unbundling and ring-fencing. More importantly, the press was unanimous in rejecting Gold Fields’ denial that this was a vote of no-confidence in South Africa: “…it is one of the strongest votes of no-confidence in domestic investment to date. Its share price jumped 7% after Thursday’s announcement …” (Business Times).

Peter Major (Cadiz Corporate Solutions) is quoted in Business Report as saying “Soon shareholders will tell companies like AngloGold, Ashanti and Harmony Gold that if they don’t unbundle they’ll sell their interests.”

So What? The Sunday Times ran its main editorial on this issue. Saying it is clear why Gold Fields has done what it has done. “The company’s output dropped by 11% in the third quarter as the strikes took their toll. Its managers have been buffeted by unrest, uncertainty and the ever-shifting sands of policy pronouncements. On the horizon is some form of nationalisation of ‘strategic’ resources and more labour unrest as the government fails to lead the country back to the sanity of proper collective bargaining.” We can’t really fault that, although Gold Fields may have had a host of others issues to consider when it made the decision it did.

Changing the guard

The deaths of two respected South Africans who played important roles in the transition away from apartheid and towards democracy continue to raise anxiety about other impending deaths of great South African leaders and about the quality of the incumbent crew. Professor Jakes Gerwel (18 Jan 1946- 28 Nov 2012), Nelson Mandela’s first Director General (among a myriad other achievements) and Arthur Chaskelson (24 Nov 1931-1 Dec 2012) former Chief Justice and architect of much of the South Africa’s judicial system were mourned in all of the weeklies.

So what? Nelson Mandela appointed both of these men to play the crucial roles they did in the young South African democracy in the mid-1990s. It is inevitable that the popular press will hold leaders like these up against the individuals and processes overwhelming the ANC and government as we write this. As Nelson Mandela’s death moves ever closer, the anxiety about the Nkandla improprieties and the violence in the ANC’s internal contests in the lead-up to Mangaung are held up to a (perhaps) mythical standard of the past. The comparisons, fair or not, sentimental or realistic, makes the tone of much of the news and commentary in the weeklies angry, fearful and condemnatory.

There is something that seems to have been missed in the public discourse about Marikina.

Without wanting to be over dramatic, I think Marikana is a clear warning that we are under immediate and serious threat; in ways that I will discuss below.

What happened – both before and after the police shooting – has been exhaustively examined and there have been excellent discussions about the untransformed migrant labour system, the collective bargaining system, the gradual implosion of Num, the awfulness of the conditions in Nkaneng, the micro-lenders explosion, the sadness and despair of families of victims in the labour sending areas  … one might have thought that every conceivable angle has been exhaustively pursued.

But we can be swamped by the details and the anger and grief.

I think something has been missed, perhaps in emphasis, rather than facts – and  because, rather than despite, the sheer attention to detail in the media coverage.

So take one step back and look carefully.

Ask: what is most essential about what happened here?

  • The police shot and killed 35 striking mine workers.
  • At least 10 other people had been killed beforehand – including 2 police officers – mostly by the strikers.

Now take another step back and let a slightly, only very slightly, broader picture come into focus:

  • It happened now, not in the apartheid era – and there is nothing with which to compare it in our 18 years of democracy.
  • The closest proximate cause was the implosion of the National Union of Mineworkers.

One more step:

… and one last step:

  • Num is Cosatu’s biggest affiliate, is the mainstay of ANC support in Cosatu and is one of 3 key pillars of support within the ruling alliance backing the re-election of Zuma (with the SACP and Kzn);
  • Amcu, Julius Malema and the wildcat strikers and their committees found each other from the beginning of the cascade (of which Marikana was a part) after the Implats strike in January.

As I focussed backwards and forwards through those perspectives I suddenly, with a surge of adrenalin, realised the danger we are in.

This is the essence of that realisation:

We have had 18 years of a comfortable ANC majority. Whatever the problems with the ANC’s performance I have mostly believed the party would continue to enjoy the overwhelming support of the majority – of so-called African black South Africans – well into the future, beyond any point worth worrying about.

Despite growing evidence to the contrary I have come to rely on the inherent stability that comes from the ANC sitting like a collapsed star at the centre of our political solar system; with that dense cinder, in turn, held together by the ANC’s own leadership sitting at the core of the party, heavy and stultifying, but essentially stable.

Marikana (in the violence, in the institutional collapse, in the momentum given political  evangelists of the Malema stripe) is about Jacob Zuma’s ANC spinning off pieces of itself, of its members and supporters, of its voters and potential voters.

The most obvious metaphors are from physics.

The centripetal force decreases as the set of interest at the centre narrow (please check my science here). The Nkandla patronage networks are in an ever tighter and more mutually dependent relationship with the SACP and a faction of Cosatu (a faction most closely identified with the Num). The narrower the centre, the less able it is to hold in place the system orbiting around itself. Ultimately, the bits are flung out of the orbit.

Forgive the scattering of a few lines from YeatsThe Second Coming, but they are so apposite here as to be inevitable:

Things fall apart; the centre cannot hold;

And the narrowing centre’s response? Well, that would be the massacre of the 34 mineworkers.

The blood-dimmed tide

The other metaphor is the vacuum, and as we know nature abhors a vacuum so it sends the first things that come to hand to fill it.

There seems to be a universe of hopeful voices out there that the first thing that will ‘come to hand’ is either a more democratic version of the ANC or a DA somehow more rooted in the nation (especially that three-quarters of the nation that is poor and black).

But what were the first things to rush into the vacuum, the vacuum left by the rapidly narrowing set of interests at the centre and by its precipitous loss of moral and political authority?

The communists had it right in 2009 already.

If the communists are good for nothing else, they are excellent at spotting fascists (I always think it is because, like alcoholics and drug addicts in recovery, communists feel the call of the beast within … but that is an argument I will need to explore elsewhere).

Already in late 2009 the SACP warned about the emerging tendency within the ANC (the tendency that coalesced around Malema, but has its roots deeper in elements of the emerging elite and their allies in the private sector):

Because of its rhetorical militancy the media often portrays it as “radical” and “left-wing” – but it is fundamentally right-wing, even proto-fascist. While it is easy to dismiss the buffoonery of some of the leading lieutenants, we should not underestimate the resources made available to them, and the huge challenge we all have when it comes to millions of increasingly alienated, often unemployed youth who are potentially available for all kinds of demagogic mobilization.

See what I mean? The communists are almost prescient as far as fascism is concerned. I covered those issues in more detail here.

Amcu and Julius Malema are part of the same phenomenon in the sense that they are both drawn into existence by the collapse of the centre and in addition share a number of features in ideology and style.

The extreme levels of violence, especially the violence of the state (deployed to defend the weakening centre) is also an essential and predictable element of what must flood in to fill the emptiness at the centre.

This is not some threatening future. Marikana threw aside a veil and revealed that this is where we are already, this is what is filling the vacated centre.

When a vast image out of Spiritus Mundi
    Troubles my sight: a waste of desert sand;
    A shape with lion body and the head of a man,
    A gaze blank and pitiless as the sun

  And what rough beast, its hour come round at last,
    Slouches towards Bethlehem to be born?

(Note: I know it is such a cliché to use The Second Coming, but it is almost irresistible given the points I want to make here. Read the whole poem at the link I provide earlier … it is not really meant to be dipped into in the way that I have here. Consider its post-First World War context. )

*It was Vladimir Ilyich Lenin who famously said the Party “found power lying in the streets and simply picked it up” – and he would have known a thing or two about that. For the most sturdy readers you can find a discussion of that here.

Lenin knew how easy it was to pick up power when it was lying around

I am sometimes tempted to think of myself as a company analyst, with South Africa as my company,  government as management and the currency and bonds as the share price

Company analysts make sell, hold or buy recommendations. Obviously a buy means the analyst believes the shares are cheap – in some difficult to determine absolute terms, but more likely in relation to appropriate peer or category comparisons.

If I was a company analyst, then what I might have been doing over the last while would have been writing a report changing my recommendation on South Africa from a hold to a sell.

Here is a bare-bones summary and ordering of that argument:

  • There are two major cycles driving negative sentiment which are coinciding now (which they do every five years):  the “strike season” and the lead up to the  ANC’s National Conference ;
  • Both these cycles are deeper and more traumatic that usual;
  • The reasons the strikes are worse than usual is excellently addressed by Gavin Hartford of Esop Shop –  here for a link to his paper at polity.org;
  • Mangaung is “deeper” and more traumatic than Polokwane because there is more at stake (some ANC members realise that another seven years of Zuma could hurt the ANC and the country; and Zuma and his backers cannot afford to lose office, because their dealing is not yet wrapped up and because their man remains legally vulnerable to the original corruption allegations against him);

But the main reason these cycles are deeper than previously is they are meeting a structural or secular trend, which consists of (and this is very stripped down):

  • Uncertain political stewardship from the top;
  • Institutional weaknesses in political (and labour) organisation characterised by systemic cronyism, corruption and nepotism (which leads to violent competition for control), managerial incoherence, narrowing support base and falsely inflated membership figures;
  • A significantly negative economic policy environment which might lower investment levels – e.g. fiscal uncertainty (because there is no way the ANC cannot keep increasing social grants and the public sector wage bill, which together are already more than half annual non-interest government spending) and a highly interventionist industrial policy (best exemplified in the SIMS document) which is one step away from ‘nationalisation by stealth” i.e. the effective deployment of private assets for public – or more narrowly governmental or even party – ends.
  • Incompetent infrastructure build, disruptive labour relations and failed educations systems are constant, apparently irresolvable and narrowing bottlenecks in the economy;
  • Institutional and administrative failures of government (in specific geographies and at specific levels of government) – with similar features to the second bullet referring to parties and labour unions;
  • Failures of the collective bargaining system – and other institutions designed to manage and mediate conflicting interests in society;
  • Growing social stresses around levels of inequality, unemployment, indebtedness and poverty – and unresolved racial overlays of the same.

Just listing that is faintly distressing … and you can imagine writing about it for weeks is not very uplifting.

But, I have, mid-stream, decided that I am not at all certain it is appropriate to take this relentlessly negative view.

Let’s go back to the political analyst/company analyst metaphor. Company analysts often suggest investors sell a share in a top quality, well  managed and highly profitable company if it is too expensive.

They might also recommend a buy on a company in all kinds of trouble – but one that is cheap and has upside that the herd of sellers hasn’t spotted.

I cannot remember an SA political shock or flood of negative sentiment that did not represent a buying opportunity in our financial markets. Remember the sell-off of  R54bn of SA resources companies after the leaking of a draft mining charter in 2002? It proposed forcing mining companies to immediately sell half their equity to black South Africans and spooked the market. The next few months was the chance of a life-time to buy excellent value company shares on the cheap.

Whether financial analysis adds real value to the investment process (or is just another bleed-off) is a matter of endless dispute. But here is why I would hesitate to call a sell on SA:

  • I cannot honestly say we have more political risk than Russia and Turkey, for example;
  • Where are the safe havens for investors, given the complex risks and problems in the global economy?
  • I cannot be sure that the negative news flow is not already in the price – it would be a very financial-market-analyst-type error to rush around shouting sell, sell, sell just after the last savvy investor had finished selling and begun buying;
  • My ‘negative secular trend’ is described as if it is inevitable – whereas there is much that can be decided and turned around by citizens, government and the ANC (despite my bleak outlook as to the likelihood of that happening, it must be in the mix as a possibility);
  • The country has a number of inherent advantages: its natural resources, its growing domestic market, its proximity to the last great frontier market (Africa), its sophisticated financial system and complex infrastructure, its constitutional framework, judicial independence and stable democracy – to name just a few.

Now obviously that does not counter the negative “secular” or structural trend I describe above. But there is something of a “baking a cake” strategy about how I have motivated for the big underlying negative trend. What I mean by that is I have marshaled all (or as many as I can come up with) of  the negative arguments in one place to bolster a particular conclusion: sell!

To make a cake one follows certain steps – mix ingredients, add energy and voilà: a nasty, stodgy, too sweet lump.

And that is a relatively simple object, with only a few requisite variables for its construction.

When we think about the future – especially when we write about it and propose to people how they should position themselves – the very first thing we should be is extremely tentative.

So I can’t, in good conscience, say sell South Africa.

I am unmistakably bleak about our politics and governance, but don’t take that as a signal to sell. I am quite likely being tossed on the waves of sentiment  – following financial market indicators, rather than leading them.

My very negativity could as easily be the indicator to start buying; that all the bad news is already in the price.

Background

This is a summary of my analysis of the news from of the weekend press (August  19) – and radio and TV commentary – concerning the events in which 34 striking miners were killed by police last Thursday (August 16) at Lonmin’s Marikana mine in Northwest Province. (Written Sunday night, so some new facts might have come to light that I haven’t included – especially not Julius Malema’s “breathtaking political coup yesterday” – see Carol Paton’s lead story on front page of Business Day today … here is a link.)

The police shootings came after a week (starting August 12) in which workers launched a violent wildcat strike reportedly demanding a wage increase to R12500.00 p/m – from the current average of about R4500.00 p/m for Rock Drill Operators, who were the main constituents of the approximately 3000 workers who had gone on strike (the wage demand issue was dissected here – a story that points out that the real wage differential between what the workers were demanding and what they were getting was actually much narrower.)

During the course of the strike, prior to the police decision to remove the workers from a nearby hill they had occupied, approximately 10 people had been killed, including members of the police force, security guards, and ordinary workers – perhaps strikebreakers, although this is still unclear.

Julius Malema visited the area on Saturday and addressed the strikers – and is the only political leader who has been welcomed to do so. (Since I wrote this Zuma also managed to address the strikers).

President Jacob Zuma’s office has announced that a (judicial) inquiry into what happened will be established (see terms of reference and other details here.)

Minister of Mineral Resources Susan Shabangu together with Minister of Labour Mildred Olifant announced on Saturday they will be establishing a “task force” to address the problems at Marikana and deal with wider problems in the platinum sector.

Commentary

It would be difficult to overstate the depth and variety of impacts of this event. Every news source reviewed here took the position that what had happened at Marikana was impossible to explain through any one category of cause and thus a multiplicity of causes was the approach taken across the board – although usually ending with the statement that the society and its top political leaders must, ultimately, carry the responsibility. Thus the commentary will be broken into the categories most commonly used in the Mail & Guardian, City Press, Sunday Times and Sunday Independent:

Marikana as union rivalry

All the weeklies placed the rivalry between the mainstay Cosatu union, the National Union of Mineworkers (Num) and the Association of Mining and Construction Union (Amcu) as the central explanation of what happened at Marikana. The consensus was that Num is slipping throughout the mining sector, having become too close to management (I doubt this is something with which either the union or management would agree) and increasingly representative of white-collar workers – and not RDOs and their assistants, and others who do much of the difficult physical work deep underground. “Amcu leaders and members launched ferocious attacks on Num members who were not prepared to go on strike”, said the Sunday Times lead editorial, summarising the most popular explanation for the central cause of what happened at Marikana. This ‘inter-union rivalry prism’ has much deeper implications when we consider the fact that Num is the key element of support for Jacob Zuma’s re-election at Mangaung in December this year, and Cosatu itself is three weeks away from its National Congress where its own leadership struggles – which are likely to be deeply influenced by what happened at Marikana – are being driven by those within the ANC – a matter explored under a headline below.

Marikana as Lonmin management failure

All the news sources reviewed here expresses the view that wages were unacceptably low in the platinum sector and that management was in some way culpable of feeding the conflict in the workforce by having attempted to make a separate deal with Rock Drill Operators at Marikana. These stories also tended to quote a 5 year study by the independent, “faith based”, Bench Mark Foundation – by chance (according to the foundation) released during the strike – that is sharply critical of the platinum mining companies for having failed to fulfill social obligations to workers and surrounding communities. (Sunday Times, Mail & Guardian, City Press)

Marikana as policing failure

There was unanimity throughout all the news sources reviewed here that the police had handled the situation badly – and that deaths were, in part, a result of improperly armed (with automatic rifles) and poorly led police forces on the scene. Most accounts went to some effort to explain that the police had been fired on by strikers, that (at least one) member had been hacked to death by strikers during the course of the action (City Press, Sunday Independent) and that at least one shot came from the strikers during the confrontation – although the only weapons collected by police after the action were pangas, sticks and iron bars … no guns (Philip de Wet corrects this in the comments sections below, saying police found 6 guns including the one taken from the murdered policeman … I am looking for a link to the Phiyega statement and will put it here when I find it.)

Most of the sources agree that “They were armed to the teeth and advancing on the police. This is not to justify the killing, but we must be aware that today we could just as easily have been talking about the massacre of policemen” – Mondli Makhanya, Sunday Times. However, the Independent Police Investigative Directorate (IPID) has announced that it will investigate the killings and ”will seek to establish if the police action  was proportional to the threat posed by the miners” – Pierre De Vos in Constitutionally Speaking.

Marikana as societal break-down – as a result of economic inequality

As mentioned, it is difficult to overstate the degree of anxiety and hand-wringing about the state of the South African democracy that came through in all the news sources reviewed here – and in television commentary throughout the weekend. The general point of concern was that the levels of inequality (raised in this case by low wages and poor working conditions of miners) will, here-on-out, be a constant destabilising element to this society. Commentary also focused on asserting that the mechanisms by which society negotiates clashes of interest – including the labour market collective bargaining regime – are broken (evidenced by this incident and the more-widespread-than-ever, and often violent, service delivery protests). Thus political stability was raised as a matter of concern in all 4 of the weeklies.

Marikana as driving exit of foreign investment

The business sections of the three Sunday newspapers all pointed out that the price of platinum rose sharply on the back of what had happened, but that Lonmin share prices fell precipitously. “Fear clashes will spread” was the lead Business Times headline and several stories suggested that “foreign investors” would exit because of endemic labour conflict and unrest. “The police killings … ‘have taken things to a new level, spreading the fear to currency and bond market investors’”, Business Times quoted Nomura’s Peter Montalt

Marikana through the prism of Mangaung.

Two issues lay the ground for Marikana to be perceived through the prism of the pervasive leadership contest in the ANC. The first is that Num itself is the key pillar of ANC support in the trade union movement (it’s the biggest union in Cosatu) and the force that swung Cosatu support for the ANC at the formation of the trade union federation in 1985. More specifically, Num, under the leadership of Frans Baleni, is backing Jacob Zuma’s bid for re-election at Mangaung in December. The powerful – and very left-wing – National Union of Metal Workers of South Africa (Numsa) under Irvin Jim – and backed by Cosatu Secretary General Zwelinzima Vavi – is opposed to giving carte blanche backing to Zuma (mostly because of corruption concerns) and it is speculated that this faction might back Kgalema Motlanthe against Zuma at, and in the lead-up to, Mangaung. Several newspapers – but particularly the better informed Mail & Guardian, suggested this dynamic will lead to an attempt (by pro-Zuma forces) to unseat Zwelinzima Vavi at Cosatu’s national congress in three weeks’ time.

Secondly, Julius Malema immediately stepped into the breach at Marikana – as he did at the comparable (because it was also driven by the Amcu/Num contest) Impala strike earlier this year. Speaking to the workers on Saturday 18 – and note he was the ONLY political leader who has been allowed, by the strikers, to address them and he received a warm reception – Malema called for the resignation of Nathi Mthethwa (Minister of Police and key Zuma ally) and Jacob Zuma himself.

The faction of which Malema is a part and the factions that have a tactical alliance with him are likely to make as much as possible of the Marikana killings, and attempt to lay the blame directly at Zuma’s door (as almost all news sources reported Malema doing on Saturday.)

Initial conclusions

  • There is a risk that it spreads – to other platinum operations, to the mining sector more generally and even to the society at large. The transmission mechanisms would be Num trying to win back ground it is losing from Amcu as well as via the already restive squatter camps and township neighborhoods. Municipal IQ, an organisation that monitors various aspects of municipalities, but particularly service delivery protests, points out that we had already passed, in July, the highest yearly totals of such protests since 1994. This outcome would not be my first case scenario. What drove the violence and the series of errors (of commission and omission) of the unions, management, the police and government that led to the killings are unique to that incident. If it does spread, the most likely first stop would be other platinum mines, and therefore the first impacts would be on supply of the metal.
  • The feed through into conflict between unions – obviously between Num and Amcu, but also within Cosatu, between Num and Numsa –  could presage a generalised increase in levels of industrial unrest.
  • Government is likely to turn its full attention to the “social” performance of the mining companies – under the Mining Charter. Expect a thicket of new regulations – and a generalised attempt to focus the blame on the companies.
  • Jacob Zuma’s comfortable lead in the Mangaung contest (and this is purely my opinion) is gradually narrowing as we get closer to the December ANC National Conference. The Marikana incident is likely to weaken his position further – and this in the context of a series of defeats in the second biggest ANC province, the Eastern Cape – which until a year ago was considered safe ground for Zuma.

It is no easy matter to explain how a paragraph from Michael Ondaatje’s poem “The Cinnamon Peeler” speaks to me about the ANC’s economic policy process.

The poem is a  sensual delight – quite unlike the ANC’s policy discussion.

Anyway … here is the relevant paragraph:

          what good is it
 to be the lime burner's daughter
 left with no trace
 as if not spoken to in the act of love
 as if wounded without the pleasure of a scar.

(Catch the whole poem here  – you will be glad you did)

Who could have believed anything other than that the ANC’s recent policy conference was a momentous event, a sharp delineation between one stage and another?

The promise was in the ‘economic freedom in our lifetime’ campaign, the calls for nationalisation of land and mines, the National Development Plan and the ANC’s policy discussion documents themselves.

The sense that some big change was imminent built towards the conference and then the news flow from the event spoke of deep geological shifts; shudders that shook the body politic.

And then … nothing.

Or rather the shifts were so subtle that it all felt like a new version of Kremlin watching (that popular art – masquerading as science – peddled by professional Western political analysts and historians circa 1955-1988 of predicting the future of global politics from who stood where on Soviet platforms).

Carol Paton, writer at large at Business Day, covered the recent ANC policy conference in a piece that should be required reading for anyone who wants to understand the subtleties – and intrinsic weaknesses – of the process.

She argues that little has actually changed in ANC economic policy since the first conference after the unbanning in 1992 – and what has changed is slight and nuanced.

Paton’s more general point is that the discussion is inherently flawed:

Economic debate in the ANC occurs in a strange, abstract and ahistoric vacuum without reference to what really happens in an economy. For most of those involved in the discussion — who are delegates from branches but also often public representatives — the sole reference point for how change might be effected in society is through the exercise of political power.

Paton argues that almost none of the ANC members and leaders involved in policy discussion  “have had the experience of running or managing an operational business or even of operating in the economy in any way other than as a public representative or government official.”

The article is well worth a read – catch it here.

For me the important bit is the disjuncture between the promise/threat of radical change and the actual outcomes.

As we head towards Mangaung it is likely that noise arising from the ANC internal politics will once again begin to imply that we might be heading towards some radical discontinuity in economic policy.

Obviously our markets will be weaker than they otherwise would have been because of this sense of uncertainty.

I am fairly certain that come the morning after Mangaung we will comb our body for a trace of the change we thought must be a consequence of that event that presents itself as so profound … but we will find that we have been wounded without the pleasure of a scar.

I am sure no-one has failed to notice the flood of South African high achievers passing through the United Kingdom over the last week or so.

A golfer was there recently, some swimmers,  a group of cricketers … and, oh yes, Julius Malema.

Julius told BBC and Sky News that he was in London working hard and meeting investors behind closed doors – to explain the ‘economic freedom campaign’ – and to give nuances on the nationalisation call.

He – charmingly – defended the racial make-up of the South African Olympic team: “we are proud of our athletes”, he said; and he came clean on his support for Kgalema Motlanthe to succeed Jacob Zuma at Mangaung in December.

This is his Mangaung prediction:

“I am coming back to the ANC in December; once we have removed president Jacob Zuma – because we are going to remove him successfully in December … and then I will walk into that conference, shake his hand and proceed to occupy my rightful seat.” (Catch that BBC clip here.)

It is difficult not to admire the audacity … and delight in the anxiety that those who conducted the Polokwane Putsch must be feeling.

But to my mind things swerve away from the comic and towards the dark when I think about this a little more.

It is a series of small things that worry me.

Surprise! (From New Zimbabwe, August 1 2012)

He pitched up at the Chingford Rugby Club and joined a group of Zimbabweans for a braai – and was apparently welcomed with open arms. He dined with Lenox Lewis

With Lenox Lewis in London – (from New Zimbabwe August 1 2012)

and spoke to a group called the Pan African Congress (not our PAC – but it has some similarities) and was covered in a spooky online journal called The Zimdiaspora  under the headline “We are inspired by Mugabe – Malema” as follows:

Turning to … Zimbabwe and its politics of land and mineral wealth redistribution, Malema had glowing praise for the president of Zimbabwe Robert Gabriel Mugabe for confiscating land from the whites and giving it to blacks. He stated they found inspiration from the actions of Mugabe as an African leader and were grateful to see him standing up against whites and their economic enslavement of blacks.

Glowing praise for president of Zimbabwe Robert Gabriel Mugabe? Sounds like a writer constrained by the diktats of belonging to a government department, something like, say … hmm … the Zimbabwe Central Intelligence Organisation?

What would covert aspects of the Zimbabwean state get from promoting the increasingly virulently, anti-Zuma Malema in London ? (I am not unaware that there is a wild leap in that last sentence … but still am going to just take it and move along.)

It’s a tenuous link but my nose is twitching: Zanu-PF’s preparation to hold off the MDC challenge is multifaceted and very sophisticated. A significant part of the pressure on Zanu-PF to meet its obligations under the Global Political Agreement and move towards democratic elections is coming from the SADC facilitation under the leadership of Jacob Zuma.

The next Zimbabwean election is going to be won or lost on the precise wording of the laws and constitution that set the conditions for elections – including how the security apparatuses will be controlled.

That wording is being finalised as I write this …. as Julius Malema takes his campaign against Zuma to the world stage, during the Olympics … no expenses spared.

I realise I have to be cautious; it is not as if the Malema ANC Youth League faction is not brilliant at self-promotion and has an almost preternatural ability to play into the current media obsessions.

Malema was quoted in the Zimbabwe Sunday Mail in June saying that Jacob Zuma was not the right person to be the SADC mediator in Zimbabwe because ‘he hates Robert Mugabe.’

I think that the possibility that Malema is acting as an asset for a (partially) hostile foreign power will play against him in the ANC’s internecine strife … or at least his enemies will try and make that case to his detriment. (Note added on 03/08/2012: I am not suggesting that there is necessarily any intention on Malema’s part … the point is rather that in effect he might be fulfilling Bob’s/Zanu-PF’s agenda as opposed to ‘the national interest’ as embodied – supposedly – by the South African president … or even more narrowly that the possibility of this being true will probably been used against Malema by the incumbents he is campaigning against.)

We must guard against paranoia and the instinct to see everything we can’t quite explain as evidence of the hidden hand of spies, aliens or the Elders of Zion – but equally we would have to be very naive to believe that the hundreds of billions of real dollars spent each years on espionage and dirty tricks just disappears into the ether, leaving no imprint on the world.

First off, let me admit, that I have no choice but to believe that the answer to the question in the title is: yes.

It’s an article of faith.

Who can live in a world where the bullies and thugs, the greedy and manipulative, the powerful and the arrogant have won so decisively that it is pointless to hope – and perhaps work – for an alternative?

Who would dare raise children in such a world?

Or bother to get up in the morning?

In a post titled “A church so broad belief is optional” I two years ago argued that the ANC’s huge electoral support and attempt to straddle every social divide had an upside (as well as several downsides).

Here’s a (slightly edited) quote from that post:

Our society has a number of real and urgent fault-lines along which clashing currents are difficult to manage:

  • White versus black (versus Indian versus Coloured)
  • poor versus rich;
  • the employed versus the unemployed;
  • Zulu versus Xhosa versus Pedi versus Ndebele versus Sotho versus Tswana versus Venda;
  • Western versus African;
  • Urban, modern and fast versus rural, traditional and conservative.

The fact of the matter is that these divisions are not adequately represented in the formal political processes of parliament and government. There is no one party on one side of any of these divisions and mostly no one party on the other.

We are a society in which the formal institutions of democracy are new and tentative – and the divisions are threatening and profound. As many groups and interests as possible need to find expression in the national political debate – and the formal institutions do not yet adequately represent them.

As a second prize, an overwhelmingly dominant ruling party that attempts to play the role of a parliament of all the people, that attempts to speak with the cacophony of the thousand arguing tongues, is not all bad.

It’s just loud, noisy, confusing and unsettling.

This argument came to mind as I picked through the weekly English language press (Mail & Guardian, City Press, Sunday Independent and the Sunday Times) this morning.

I do an exhaustive/exhausting reading of the English language weeklies every Sunday afternoon/night to produce a summary analysis for my main clients by Monday morning. It is an extremely painful task and I am always tempted to quote that famous Punch magazine cartoon from November 9 1895 by George du Maurier to describe what I really think of these newspapers. A bishop is dining, in a formal setting, with a junior curate:

Bishop: “I’m afraid you’ve got a bad egg, Mr Jones”;

Curate: “Oh, no, my Lord, I assure you that parts of it are excellent!”  

But I never actually say that, because there are always a few articles, features and editorials in all four of these newspapers that are truly excellent: well researched, well written and insightful; and it would be untrue and unjust – and a little arrogant – for me to suggest they all stink by virtue of being surrounded, as they are,  by rotten, ill-informed and sensationalist rubbish.

So back to the title question.*

The Sunday Times has Motlanthe rejecting Zuma’s deal of the deputy presidency in exchange for him (Motlanthe) not standing in the presidential race.

It’s a particularly poorly structured story (trying to get away with suggesting a whole range of things without actually saying any of them) although it is full of tantalising tidbits.

So lets take the hints (from all four of the mentioned newspapers) as real possibilities:

  • Motlanthe stands against Zuma;
  • Unraveling patronage networks, especially in eThikwine, open(s?) the possibility of driving a wedge in Zuma’s Kwazulu-Natal support base;
  • To strengthen his ticket against Motlanthe, Zuma offers Cyril Ramaphosa the deputy presidency;
  • Gauteng suggests Joel Netshitenzhe as part of the Motlanthe challenge – essentially to stand against Gwede Mantashe (who’s a cornerstone of the SACP support for Zuma);
  • Winnie Madikizela-Mandela comes out more explicitly anti-Zuma (especially of his handling of Julius Malema) and supportive of  the putative Motlanthe challenge.

So what do we have there?

A Zuma, Ramaphosa, SACP ticket versus a Motlanthe, Netshitenzhe, Winnie, Malema ticket?

Oh Lord, give me strength.

Can’t we have a Joel Neshitenzhe, Cyril Ramaphosa ticket supported by Motlanthe and opposed by the ANC Youth League, Winnie Mandela and an unholy alliance of the Kwazulu-Natal and Mpumalanga patronage networks? (I have written previously about Joel on this website here,  here and here.)

That desire is the moral and intellectual equivalent of arm-chair sports selecting. It would be nice … as would a leadership consisting of a young and vigorous Nelson Mandela, Oliver Tambo, Walter Sisulu …

So quickly, before I go back to picking my way through the odorous wreckage of the four weeklies spread out on my table and floor (the soul-crushing banality of etv’s Sunday afternoon offering in the background and the Cape Town winter sun finally beckoning outside):

What happens at Mangaung will not decisively determine the character of the ANC.

Polokwane was billed as a major rescue attempt – saving the ANC from the dead hand of Mbeki and rolling back the power of the narrow BEE elite which was allied to the most predatory forms of global monopoly capitalism.

Polokwane was going to reinstill the movement with idealism, energy and enthusiasm and channel it into ‘a pro-poor strategy’.

Well, we know how that played out.

Mangaung, like Polokwane, was a result of a complex interplay of forces and contests that go deep into South Africa’s past.

I cannot honestly argue that Jacob Zuma is a better or worse candidate for the ANC or the South African presidency than Kgalema Motlanthe – although I accept that some people can and do (with a lot of enthusiasm).

However, politics is a matter of contingency. It really is the art of the possible … in this sense it is full of difficult compromises.

Any individual who finds him or her self in an ANC branch or region or leadership position, will be faced with choices that, when aggregated, will shape the future of the ANC and, quite possibly, the country. (The same is, of course, true for any South African, inside or outside the ANC.)

Those choices might be circumscribed – by history, by existing power structures and alliances, by the momentum invested by those who control the patronage networks and by wherever it is that the individual finds him or her self.

But if you are not going to throw up your hands in despair and retreat to your bed forever, if you are unable to cut and run, then you have an obligation to make some kind of decision and choice.

I do believe that what the ANC becomes matters – although what it becomes is not going to be determined at Mangaung or as a result of it being led by Kgalema Motlanthe or by Jacob Zuma.

(Note added a few hours later. On reflection, I might have empasised that the cartoon is even more apt for the ANC than it is for the English language SA weeklies … it was meant to be suggested, almost by my omission … but on reflection, I think I will spell it out … which I have now done.)

I am an independent political analyst focusing on Southern Africa and I specialise in examining political and policy risks for financial markets.

A significant portion of my income is currently derived from BNP Paribas Cadiz Securities (Pty) Ltd.

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