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… but it’s difficult to know who to back
Thank you Mail and Guardian for publishing the story we all wanted even though you have probably broken the whole cannon of ethics in journalism.
The story to which I refer, titled “Ramaphosa starts fight for top job”, was published in the print edition of the aforesaid newspaper on November 13, it was written by Mmanaledi Mataboge & Matuma Letsoalo and leads with that treasured line: “ANC deputy president Cyril Ramaphosa has declared his intention to stand for the ruling party’s presidency in 2017, sources say.”
Yes, we all know that sources say “Space pumpkins stole my baby”, “Jesus was an astronaut” and “Jacob Zuma has no relationship whatsoever with SAA chairperson Dudu Myeni”, but in the M&G case referred to above I am prepared not only to forgive them because they took one on the chin for the team but I honour, respect and encourage them through the difficult times that lie ahead for them and other similarly esteemed organs.
So … Cyril Ramaphosa is the presidential candidate for a slate including Gwede Mantashe, is (probably) backed by Gauteng and Eastern Cape provincial ANC’s, is also backed by Limpopo but unreliably and incoherently. They (this camp) will fight on every terrain where votes are up for grabs in 2017 – which includes KwaZulu-Natal that they narrowly lost to the opposition at the provincial conference last weekend. They will obviously try to win Western Cape, Northern Cape and seem confident that the ‘premier league’ provinces (Free State, Mpumalanga and North West under the the charming patrons, Ace Magashule, David Mabuza, Supra Mahumapelo) should yield votes in their favour too.
The other camp, let’s call it the Nkosazana Dlamini-Zuma Camp, is backed by the ‘premier league’, the ANC Women’s League, the ANC Youth League, the winning faction in Kwazulu-Natal (and that is big cheese in ANC internal national votes) and all the premier league provinces. So they are ahead, in case you missed that.
If that’s all plain sailing for you up till now, here comes the confusing bit: the SACP is under vigorous attack by most of the elements supporting the Dlamini-Zuma camp and we must assume the SACP is backing the Ramaphosa/Mantashe ticket.
I would prefer things to be neater. I haven’t argued this point in these pages in enough detail – or with enough vitriol – but in my private pantheon of villains of South African post liberation politics the SACP has pride of place. In about 2005, facing a probable ousting from the ruling alliance by Mbeki, the SACP pulled off a tactically brilliant but deeply unprincipled counter stroke by riding the debauched, corrupt, amoral, untrustworthy, deceitful, disreputable, tribal, traditionalist, sexist, shameful and scandal-ridden – but still saleable to the populist masses – Jacob Zuma back to power in December 2007 – later ensuring Mbeki’s early removal from the presidency. (Can I say that on my blog? No, you’re fine. That’s all true. I took the illegal stuff out; it halved the length of the story – Ed).
The SACP was lavishly rewarded in the Judas coin of cabinet posts and general status and influence and continued to act as Jacob Zuma’s strength and shield through the myriad scandals that were to follow.
It is my belief that the impact this party’s control of industrial policy has had on our national economy has been little short of ruinous, and its top leadership has shown arrogance, contempt and self-aggrandisement on a scale I would never, ever, have predicted from the party I idealised throughout the 1980’s.
So what happened? Why did groups I assume are close to … or proxies for … Jacob Zuma begin attacking the SACP. (Lets leave the #FeesMustFall for the moment as a stroke of luck for those pushing this line … and get back to it when we are being more conspiratorial.)
Slight rumours of criticism of Jacob Zuma’s various excesses and the SACP’s culpability in its stance in relation to the president filtered into the public domain from discussions internal to the SACP in the lead up to its 3rd Special National Congress in July 2015. Perhaps that self criticism was a lot harsher and the party realised that sticking with Zuma, his policies, his patrimonial and clientelist style, his absence of a plan would lead the country, the ANC and the SACP towards catastrophe?
I do think the SACP has been a restraining hand on the worst excesses of corruption and patronage … so it is not inconceivable that in contrition (and lack of other choices) they have joined the good guys.
I have discussed in detail in the past why Ramaphosa will always be treated with caution by the exiles, Robben Islanders, and the those who worked primarily in the underground military and security apparatuses of the banned ANC. I will get back to this question as I think the conclusion I drew might be changing.
Three last small points
I think both candidates would be more than adequate to fill the positions they are competing for. A significant portion of Dlamini-Zuma’s support is coming from groups that are characterised by the words I used to describe Jacob Zuma six paragraphs above this one. If there is a large centrist group of progressive Africanists, waiting to show their hand for Dlamini-Zuma, let them do so soon. And they should learn from the SACP that unprincipled alliances can end up doing you much harm.
The ‘woman for president’ argument is basically rubbish. Interestingly it was Thabo Mbeki in his struggle against the rise of Zuma that brought up this facile and distracting little trick. At least Mbeki had made the right noises about the role of women throughout his presidency so that when he suggested Phumzile Mlambo-Ngcuka (then deputy president), alternatively Nkosazana Dlamini Zuma, it could not as easily be dismissed as a dishonest ploy.
The argument being advanced in 2015 that Nkosazana Dlamini-Zuma should be president because it is time for a woman president, is being advanced by the most backward, traditionalist, dare I say misogynistic, elements of the ANC. Dismiss the argument out of hand – even if the appointment of a women president, perhaps of the highly experienced Nkosazana Dlamini-Zuma, might be something of which we could all be justifiably proud. The argument has been advanced purely for factional reasons – which doesn’t necessarily mean it won’t get support from those who believe it would be inherently a good thing.
Finally this is all being played out in the public realm (which basically means it is being cobbled together out of hints and rumours by analysts and journalists) extremely early.
Remember this is a contest that will only be formally resolved in 2017 (probably in December of that year) at the ANC elective National Conference and only lead to a change in the country’s government and president in 2019. I assume it is a sign of desperate desire for change (for the better) and fear of change (for the worse) that has caused these issues to assume such a central public focus so early.
I have been completely taken up with a project (now completed) that argued that the black African middle-class was our single biggest asset and the workings of the interests of that class in the world would save our politics and help our economics. Yaay!
The basic argument looked at the defection suffered by the ANC in the May elections from its most sophisticated constituency and went on to argue that things were going to turn out rosy in the end. (There are hundreds of tables and graphs and other clever financial market type number crunching that was mostly done by my brilliant colleagues …. but I will only publish a version of that when I have had a chance to chat to them and get their permission).
Not everyone bought our story, but soon you will be able to make up your own mind if our grounds for optimism (that the ANC self-corrects) have an adequate basis.
The ‘black African middle-class saves South Africa’ project (which is what we started calling as a sort of shorthand … the report is LONG so trust me that really is shorthand) has held me back from completing my promised comments about the SACP. The further we went with the ‘middle-class’ project, the more disturbed I have become about the the role the SACP played in engineering the end of Mbeki’s presidency and it’s iron protection of Zuma through the chaos he has brought upon us over the last 4 years.
So as promised I will write that out here and publish it before year end … that’s the SACP story … so 2 promises so far.
Meanwhile here is an extract of my bespoke comments (now too dated to remain bespoke) on the Numsa split (written on the trot) a week ago. My brilliant editor friend in London suggested it be titled:
South African politics: Love’s labours lost
Numsa expulsion … if you love it let it go, if you hate it pray for its demise
The central Executive Committee of Cosatu expelled the largest member of the trade union federation at an extended weekend meeting of the special Central Executive Committee (CEC). Irwin Jim, Numsa general secretary gave a 3 hour long spirited defence of Numsa and attack on those trying expelling the union – but to no avail. It has always been a foregone conclusion, but what Numsa was doing was contesting the terrain, trying to stay as long as possible to take as many members and individual with them. The strategy has probably worked and they have come out, if not smelling of roses, then not badly damaged.
Numsa’s ideological position reaches back in an unbroken line to a strong and independent left faction (referred to as Workerists) which at the formation of Cosatu in 1985 were still strongly critical of the over-close relationship with the ANC. They believed that the ‘national liberation agenda’ of the ANC would swamp the more limited agenda of the pursuit of workers’ rights – and the more expansive pursuit of socialism – and that therefore the unions need to be wary of this ally and always fight for their independence.
As it turns out Cosatu did pretty well out of its relationship with the ANC – getting much of the labour market structured in their favour – to the point that it has done some real damage to our economy. However, the tension between the ANC and Cosatu has continued to rise. Cosatu didn’t like the National Development Plan (too pro-markets), Cosatu didn’t like e-tolling (who in Gauteng and outside The Treasury does?), Cosatu didn’t like the Treasury setting the limits of public sector wage increases, Cosatu didn’t like the youth wage subsidy, believing it to be the short end of segmentation of the labour market into more and less protected (cheaper and more expensive) workers.
And of late the ANC, at the end of its tether about the losses of revenue from the platinum and Numsa strikes, at the violence that accompanied the platinum strikes, at the damage done our investment image by strikes, at the damage done the limping infrastructure programme plagued by strikes, has finally started talking about amendments to the Labour Relations Act that would make it a lot more difficult for Cosatu to strike (make secret balloting compulsory) and make it difficult for nationally damaging strikes (like Amcu’s strike in the platinum sector) to go on indefinitely (make some form of forced independent mediation obligatory after a certain time of being on strike.)
Numsa, and Irvin Jim – and Cosatu general secretary Zwlinzima Vavi – have gradually come into more and more serious conflict with the ANC and the SACP over these policies – and the relationship has finally broken. It must be said that Vavi and Jim have also been on the side of the angels on a number of different issues as well; Corruption Watch, abuse of ministerial car allowances, various human rights issues, including the Dalai Lama visit, the Right to Know Campaign, the Treatment Action Campaign, the protection of the Public Protector, the getting of Zuma to pay back the money, the Gupta wedding, horror at the proposed done Russian nuclear deal … the list is too long, but, in general (and with one or two notable exceptions), Cosatu under Vavi and Jim have defended the defensible – unlike their erstwhile comrades in the ANC and SACP
The expulsion of Numsa, which might quickly be followed by the exit of its closest allies the South African Commercial Clothing and Allied Workers Union (Saccawu), Communication Workers Union of South Africa (Pawusa), Democratic Nurses Organisation of South Africa (Denosa), and South African Football Players Union (Safpu) will leave Cosatu much weakened and with an over preponderance of public sector unions.
Numsa – the world is its oyster
For Numsa, the world is its oyster. It has announced intention to set up forums of some form of ‘socialist alliance’ – which we must assume will evolve into a political party, perhaps testing the waters of some constituencies in Nelson Mandela Bay and Johannesburg (where it has pre-existing strong union organisation that could easily be redeployed as party structures in the 2016 municipal election.
Numsa can also now freely pursue its strategy for vertical integration into mining, processing, construction, energy, and manufacturing, including light manufacturing and food processing. Numsa sees these whole value chains of particular metals (and possible other minerals) as natural pillars through which they can exert more power over employers and employer organisations. Up until now Cosatu’s slogan of “One Industry, One Union, One Federation” has prevented Numsa realising its full ambitions (although several unions, especially Num have complained for years that Numsa has poached its members.)
This leaves Cosatu with the heavyweight public sector unions as its dominant component (and, officially, remember it is still bigger, if not more vigorous, than the bits that have been expelled or might leave in sympathy with Numsa). However the public sector unions are about to embark on a do-or-die wage negotiation in the Public Service Co-ordinating Bargaining Council. Keep in mind that Numsa fought to stay in Cosatu primarily because it believed it could pull the heart of the federation with it, that in each of the unions, large and small, there were branches and sections and individuals who supported Numsa and supported Numsa’s decision to not back the ANC in the last election. Including significant parts of the public sector unions.
Strikes are a testing time – in fact, wage negotiation are a testing time – and even more so when you have on the other side of the table representatives of a state, so absolutely constrained by the fiscal ledge to which it is clinging that is unlikely to shift towards your bargaining position. The MTBF issued by Finance Minister Nhlanhla Nene last month was as close as we have come to the austerity of Trevor Manuel’s first few budgets in the mid 90’s. This was the heart of the Cosatu (and South African Communist Party) attack on Mbeki’s government, with ‘the left’ arguing it was a form of Kowtowing to the Washington Consensus. ‘The left’ then and now believe the way to economic growth is by state spending as a stimulus that creates the virtuous circle. Nene’s budget was the heart of the “1996 Class Project” that Zuma and his allies supposedly defeated at Polokwane in December 2007, which takes the decidedly opposite view of growth: that the state needs to make room for investment and that government needs to create an environment maximally attractive to the same. And part of doing that is keeping borrowing and therefore spending strictly within the bounds acceptable to global capital markets.
Cosatu is now dominated by unions that are not involved in the productive economy. It’s basically the South African Democratic Teachers Union (Sadtu) and the National Education, Health and Allied Workers Union (Nehawu) and the burned out cinders of the likes of the National Union of Mineworkers and other bits and pieces. More than anything these unions are dependent on state spending … but from a state that seems to be all out of resources. We do not think that while Sadtu and Nehawu are ostensibly close to the Zuma faction of the ANC that this is going to take any of the sting out of the coming public sector wage round. Which trade union loves the boss enough to tell its members to back off because he is in political trouble? None that we have ever heard of. And anyway these unions all face a myriad splits, including towards Numsa … they have to show their members they can win them a decent deal.
The SACP backed, to the hilt, with everything it had, Jacob Zuma’s rise to power at Polokwane. It did so because its main task was to stop Mbeki and the political programme he represented. Mbeki was increasingly basing ANC policy on promoting the rising black middle-classes and he was doing so at the expense of the trade unions and the SACP for whom he seemed to express ever greater public contempt – and in my opinion would eventually have moved out of the ruling alliance … essentially by collapsing it. The is no question in our minds that Mbeki was making sure that both the SACP and Cosatu had less and less power over ANC policy making. Obviously Mbeki overplayed his hand, not believing his enemies would stoop to backing Jacob Zuma for president. Well he certainly called that one wrong and the rest is history.
The SACP still sits as Zuma’s main backer. Cosatu has essentially collapsed under the pressure of trying to keep its unity and back this president at the same time. The ANC Youth League was expelled along with Julius Malema because Zuma became so tarnishing that it was impossible to stand by him … and it now (the ex-ANCYL) exists as a vigorous and challenging opposition party, the EFF.
So the SACP is sitting there in the Kraal with Jacob Zuma, defending him to the hilt on his myriad transgressions, trying to explain to the world how it (the SACP) is the true representative of the working class as the millions follow Numsa out of the alliance – and it is impossible to avoid the fact that Numsa’s most virulent criticisms are for the SACP.
The ANC is looking particularly forlorn. They fought this split, understanding that the loss of Numsa would lead to other losses and would make the 2016 municipal election a myriad-sided fight in which the ANC was likely to get a bloody nose. The ANC still has way to fall. It got just over 62% of the vote in the national election in May this year and just under 62% in the municipal election in 2011. The trajectory is downwards (the party does worse in municipal polls) and there is much fear (if you support the ANC) and much anticipation (if you don’t) of catastrophic results for the ANC in 2016.
As it happens part of our ‘upside surprise’ scenario, is one in which the ANC, freed from the constraints of its alliance with organised labour, recognises the errors of its ways, elects a clean, reforming and effective leadership in 2017 (the National Conference), shuffles the current crew off to the safe retirement and comfortably wins the 2019 elections with a decent development plan at the helm. But this precisely requires the ANC getting a serious shock in the 2016 election. It sounds like a fantasy and probably is. But it is unavoidably apparent that the conditions are looking increasingly hostile for the ANC.
It does appear that if the ANC doesn’t do something radical and soon, it could be in serious electoral trouble. Of course it might chase the EFF and Numsa’s socialist policy in the belief that this would win the party votes. We think there are other and better options the ANC is considering but they are not on the table yet and all we can hear is the repeat of “welcome to the second, more radical phase, of the transition” – which doesn’t actually mean anything, but sounds vaguely (distinctly?) threatening to investors.
I will get on to the weighty question of whether Jacob Zuma might retire before his term of office is completed momentarily, but first let me mention that I have been busy with what started as an idle rumination about the South African Communist Party.
But has turned, inevitably perhaps, to “become persistent and recurrent worrying or brooding” (from the third meaning for ‘rumination’ given in the link above.)
I am at a serious disadvantage when assessing the SACP. Unlike many of my readers I was always an admirer of the party – well, certainly in the bad old days of the struggle against apartheid.
Slightly more difficult to explain is that I am still moved by Billy Bragg singing The Red Flag, and the pleasure I once took at the same artist (or perhaps another, even Google can’t nail it for me) singing a song that went something like “Stalin wasn’t stalling, when he told the Beast of Berlin, that we’d never rest contented, till we’d driven him from the land.”
So I am hard wired, deep in my political DNA, to not think ill of the SACP – which is why the party riding Jacob Zuma to power, its dogged defence of the President’s most unsettling activity and much of the threatening sloganeering and bullying that gets published as Red Alerts on Umsebenzi Online have had me at a real analytical loss.
I have provisionally titled the post: “O SACP, SACP! wherefore art thou SACP?” It wanders around a bit, speculating wherefore, actually when you get right down to it, art the SACP? There are various asides of a semi-personal, even light hearted, nature – but the path of my meander has definitely darkened and right now I feel I am, metaphorically speaking, in a gloomy forest and the growing stench suggests there is a poisoned well somewhere up ahead.
So I have decided to take a bit more time and care on that.
Meanwhile here are some of my recent comments (sent to clients on the 3rd of this month) about the increasingly widely discussed matter of the future of Jacob Zuma.
Jacob Zuma – will he stay, will he go and does it matter?
My basic view of the question in the title is:
- Jacob Zuma is more likely to retire early that I have considered previously.
- There is wide variation in the quality of South African politics, administration and government, with awful, mediocre and excellent aspects. This variation will not be overwhelmed or overdetermined by whether Zuma stays or goes – although it would also be incorrect to suggest it doesn’t make a blind bit of difference.
- In general I would assert that Jacob Zuma is as much a symptom of the problems as he is a cause of them – although I would, if someone held a gun to my head, go with 60% symptom, 40% cause (I had it the other way around when I sent this out initially, but that was just my dyslexia playing havoc: Zuma is less the architect of history than history is the architect of Zuma – no Nkandla pun intended).
- Additionally, Jacob Zuma’s term of office would end in 2019 anyway and his replacement would be elected ANC President at the 2017 national conference. We are, at most, not much more than a year off knowing (or having a pretty strong idea) who the likely replacement of Jacob Zuma will be even if he (Zuma) serves out his full second term.
- However, unexpected transitions can be destabilising, especially if the incumbent has much to lose if he loses (like going to prison, losing some of his and his family’s accumulated assets and having his powerful political network’s continued asset accumulation threatened – just to take a few arbitrary and hypothetical example of why such a persons going might be a messy business).
However, I am of the opinion that the question is worth considering, but we need to get some of our methodology right first:
This is a future event and as such it is uncertain and unpredictable. There is no acceptable methodology (that I understand or can use) that can reliably (academically, empirically, scientifically) give a probability estimate as to the potential outcomes.
It is crucial to avoid the trap of predicting a particular outcome and then assembling the evidence to support it – and, further, attempting to defend the prediction over time as ‘the facts’ move against it.
We need an adequate reason to believe the outcome is important, not important or somewhere in between – or all of these things at once , with this last choice being the one I would probably go for.)
The past (Zuma’s survival against the odds up until now) is not a predictor that he will survive the confluence of events. If that argument held weight, then we should argue that nobody alive today will die because they haven’t died up until now – I attempt to fill-out this assertion under “Jacob Zuma, the survivor” below.
Normative reasoning is acceptable, but we need to be conscious of doing it when we do it. In this case my ‘normative’ assumption is that a successful and calm succession completed before Zuma’s term of office expires in 2019 would be a ‘good thing’, perhaps even a precondition for the reestablishment of political stability and financial market trust in the bona fides of government (and lower risk levels in the geography and assets administered by the South African state). However, as I mentioned previously, I think this is a necessary not sufficient condition for such improvements.
Jacob Zuma, the survivor
It is being argued repeatedly that Zuma is the quintessential survivor, that he has the ANC and its National Executive Committee wrapped up, that he demonstrated this again at Mangaung in December 2012 (see here for a persuasive example). I do not disagree with these assertions. But to accept that argument as complete we must establish that there are no new facts or new elements that might impact upon that assumed outcome.
Much has changed (both in fact and in my interpretation of the facts) over the last 18 months:
- The alliance of forces that backed and defended Zuma’s rise to power at Polokwane has disintegrated. Crucially Julius Malema is now heading a hostile opposition party energetically represented in parliament and Cosatu is undergoing an on-going collapse – and it’s biggest union Numsa is in the process of setting up a socialist political movement that has as one of its founding principles that Jacob Zuma is the epitome of the corrupt and disastrous leadership cadre that have hijacked the ANC and the country (this is Numsa’s – and Malema’s/EFF’s – oft expressed view, not mine.) These are the very people and institutions that where the centre of the campaign that brought Zuma to power. (The SACP is pretty much ‘the last man standing’, which is what has led me to look more closely at the whys and wherefores of that phenomenon.)
- I am under the impression, but am unable to ‘prove’, that key elements and individuals of Jacob Zuma’s support base in Kwazulu-Natal are starting to hedge their bets and keeping open the possibility of shifting their support to either Zweli Mkhize (ANC national treasurer and previous KZN premier) or Nkosazana Dlamini-Zuma (Current AU chair with too many other credentials in SA politics and government to begin to list). Both these candidates would be acceptable to the powerful (dominant?) KZN ANC. I cannot be certain if this is “true”, but this is my impression.
- There are signs (rapid apparent weight loss, increased ‘time off’) and widespread speculation that Jacob Zuma’s health is an issue in play. Again I cannot ‘prove’ this – that would require his confidential medical records, amongst other things – but there are many circumstantial supporting elements that I have discussed several times elsewhere.
- The linked controversies around Jacob Zuma, the allegation that he has improperly allowed the Gupta brothers to capture important aspects of the state and government, that he has abused public finances to build his Nkandla home, the various allegations around the Arms Deal scandal, with reference to convicted fraudster Shabir Shaik, (and the attendant ‘spy tapes’ scandal), the infiltration and destruction of the National Prosecuting Authority, the similar damage and modality of damage done the various structures of national intelligence as well as crime intelligence – all apparently in an attempt to protect Zuma from the legal consequences of his actions are starting to cause serious strain for the ANC.
- The losses of 11% of voting support in the ANC’s most sophisticated middle class electoral constituency in the economic heartland of Gauteng in May this year and the serious worry by the Gauteng ANC that this damage might deepen in the 2016 local government election. The assumption (that I share) is that at least part of this is because of the myriad scandals surrounding Zuma.
- The noisy disruption of Parliament by the EFF in an attempt to get Zuma to account to the public and to Parliament for Nkandla expenditure … and the degree of national embarrassment that surrounds this.
- There has been a coup (which has now degenerated into a volatile stalemate) against the Lesotho government which had just issued the Gupta brothers with diplomatic passports. This both exposes the degree to which the Guptas have captured key political institutions in South and southern Africa, but also that that capturing is being exposed and challenged all over the place and the most significant person most publicly connected to the Gupta brothers is Jacob Zuma.
- Jacob Zuma has just visited Russia, alone and forlorn, and in a manner and context that appears to me that he is the supplicant – when logic dictates that Putin should have been the supplicant.
The future, scenarios and consequences
- Zuma may well survive to see out his term but the facts suggest that the possibility of outcomes different from that are rising, and must be seriously considered.
- Zuma’s health could deteriorate and he could be forced out of office (this is a risk with any leader at any time but is raised with regard to Jacob Zuma for the reasons discussed previously)
- The ANC, suffering the myriad consequences of Jacob Zuma’s myriad failings, might be finally moved to attempt to move him out. The ruling party could do this by promising him security in Nkandla and immunity from prosecution. It is by no means clear that the ANC could summon the leadership capacity to undertake such a manoeuvre and it is unlikely that the National Executive Committee of the ANC, for now completely beholden to Jacob Zuma for jobs, position and access, would be the instrument that could initiate such a manoeuvre. But just because I can’t come up with a mechanism which might bring about such a change does not mean that that change will not happen (although I do accept that the arguments here would be more interesting if I was able to give a plausible and new mechanism for such a change.)
- If there were a sudden ‘run’ on Zuma, if his apparent weakness suddenly became more visible, his supporters would vanish like the morning mist. There is no cadre of leaders and supporters waiting in the wings to set up a version of the Cope political party that Mbeki’s supporters established after Mbeki was fired.
- There are a number of potential successors to Jacob Zuma, the prospects of whom I have assessed on a number of different occasions. To the two I have mentioned earlier in this note, add Cyril Ramaphosa, Lindiwe Sisulu, Baleka Mbete – and, as a safe pair of hands, stalwart stand-in Kgalema Motlanthe. Any of these candidates would be acceptable to the electorate, to the ANC and to financial markets, although each group, and probably each individual within each group, might have his or her specific preference.
- Power vacuums and unexpected transitions can be destabilising and risky and can be accompanied by wild swings in financial markets. It is important to keep the possibility of this in mind. This is not the same as saying: ‘this is happening’ … or even: ‘this is more likely to happen than not’. It is purely saying this is more likely to happen than I previously thought and it is worth keeping in mind.
A useful critique of thinking around this issue was published by a senior ex-intelligence officer Andre Zaaiman a few days ago. Catch that here … you might be able to see that we spoke about the issue over a cup of coffee before either of us wrote about it.
It’s the 1st of April and I have already seen that Helen Zille has accepted an ‘elecnomination‘ to spend two weeks living in Khayelitsha, surviving on the minimum wage and using a bucket toilet. Good for her, I say.
In other news the DA has announced that the Western Cape government it is going to upgrade Zille’s private residence in Cape Town. They plan to spend R20 million, but have wisely put aside R246 million in case of overruns. Nothing wrong with that … as we have seen elsewhere.
In entirely unrelated news the Sunday Independent carried a story about some polling apparently undertaken by the legendary Stan Greenberg on behalf of the DA.
Just as an aside: the headline in the Sunday Indepent calls Greenberg the “De Niro of politics”.
This is a picture of Stan Greenberg:
This is a picture of Robert De Niro:
Oh yes, now I get it. They are both white men, over a certain age …. (oh leave it alone! It’s not important, why don’t you just let it go? And anyway maybe there is a joke here you just don’t get – Ed)
Hmm, okay, sorry …
The DA polling was something of an antidote to an Ipsos poll commissioned by the Sunday Times and published a week earlier.
First the antidote from Stan, the DA and their various minions:
Then the Sunday Times Ipsos poll published March 22:
I am not, actually, saying treat this sort of thing with the same caution as you would treat an April Fool’s story. Both the pollsters have defensible and explicable methodologies … but clearly they can’t both be right.
In general I treat the polling with a degree of caution. Results are often leaked or announced with the intention of impacting on the final outcomes (by, for example, scaring voters and supporters into getting out to the voting booths or by bolstering the flagging energies of party workers).
I have used, as a sort of deductive shorthand, a ‘below 60 percent’ versus an ‘above 60 percent’ for the ANC as an indicator of a ‘danger zone’ for Jacob Zuma.
Instinctively I think the ANC will lose votes because of the leader’s breathtakingly cavalier attitude to public money and resources. The alternative would be for me to believe things about the average South African voter that I would feel uncomfortable about admitting in public. The average ANC member voted for Jacob Zuma as president of the party at both Polokwane and Mangaung … so there is nothing I need to say about that.
So … as part of my weekly review of SA politics yesterday morning I tried to collate some of the responses to the Nkandla Report with the specific intention of using these as an heuristic tool to gain some deeper insight into what is going on.
That’s just a fancy way of saying that when I am unsure of what is going on then I look around at the responses of people I suspect do know what is happening and try and extrapolate from that a greater level of insight i.e. I am using the responses as a heuristic tool … although as you will see in the link ‘heuristic’ means more than just an investigative short cut. It didn’t achieve what I hoped, but here are my truncated efforts anyway:
Responses to the Public Protector’s Nkandla Report reveal much, but not enough
Responses to Public Protector, Thuli Madonsela, ruling that President Jacob Zuma and his family directly benefited from the improper use of state funds in the (approximately R230m) upgrade to his (Jacob Zuma’s) Nkandla homestead and that he “failed to act in protection of state resources” are flooding in from all directions.
Obviously all the major opposition parties are using the report to attack the ANC and Zuma – and are generally deifying the Public Protector. However, the diverging responses from within the broad membership and leadership of the ruling African National Congress are the most relevant and interesting.
The party itself (and the SACP and the formal structures of the divided Cosatu) are essentially defending the President and/or attacking Madonsela (or the manner in which her report was delivered).
Several news media have attempted to list the number of ANC leaders and widely respected ‘liberation heroes’ who have in some way expressed both support for the integrity of the Public Protector and support for her findings. The list has included previous President Thabo Mbeki, Deputy President Kgalema Motlanthe, Defence Minister Nosiviwe Mapisa-Nqakula (although her problems were primarily with the sexist language of some of the criticism … and up till now I have seen her as something of a Zuma loyalist, so I will have to do some homework on this one), ex-minister Pallo Jordan, ex-minister Ronnie Kasrils and a host of other individuals (e.g. Ben Turok and Marion Sparg) and particular branches of the party and parts of individual unions of trade union federation ally Cosatu which have in some way defended the Public Protector and supported her findings.
‘Nkandla’ is, on the face of it, small change compared to myriad similar scandals surrounding the President. The difference in this case is a ‘Chapter 9 institution’ (an institution established in terms of Chapter 9 of the South African Constitution to “strengthen constitutional democracy in the Republic”) has made findings that essentially allege that Jacob Zuma has improperly benefited from state spending and that while there is no proof that he engineered this outcome, he had a responsibility, according to the Public Protector, to be aware that it was happening. These might be ugly, but not exactly impeachable offences – unless you believe they are purely the tip of a much larger iceberg hidden through luck, trickery and a good legal strategy.
There are so many issues that this raises, but I will mention only 3:
Firstly, does the ANC lose votes because of this? More precisely: does the release of the report just over a month before the election lose the ANC more votes than it would have lost anyway as a result of its president’s … how should I put this … now very widespread reputation for poor judgement with regard to his private financial affairs? I would guess ‘yes’.
I have no doubt that there are vast groups of voters who see Madonsela’s report as just another attack on their candidate and who will be completely unmoved by the details. I also suspect that there is a large group that despise the ANC leadership choices but will stick with the party in the belief that it will self-correct sometime soon. However, there are obviously those for whom Madonsela’s report is the proverbial straw – but I suspect this is a marginal group. If the margin is between 60% and 59% then Madonsela’s report could make an important difference. If it is between 63% and 64% then, voting wise on May 7, it is not going to make much difference.
Secondly, the ANC has benefited from occupying the high-ground of moral authority. Whatever its failings it was always the party of national liberation, the party of Nelson Mandela, the party that embodied the majority of black South Africans’ struggle for self-determination and against apartheid – unimpeachable and morally irresistibly aspirations and goals. The voices of disquiet from within the party are beginning to suggest that this objective or record has been redeployed in a baser struggle.
Listen carefully to the coded and heavily portentous words of Thabo Mbeki talking at the 20th anniversary of Wiphold at Sun City on March 22 2014:
“Regrettably, today, a mere 20 years after our liberation, it is obvious that many in our society have forgotten or are oblivious of the human cost our freedom entailed. Accordingly, these abuse the gift of our liberation to abuse our precious freedom to do things for themselves whose only objective is personal aggrandisement – thus to use their access to state, corporate and social power radically and systemically to subvert the required sustained and speedy advance we need towards the realisation of the objective of a better life for all our people.”
The Public Protector’s report is reverberating through the ANC (see key ANC intellectual and former cabinet minister Pallo Jordan’s column in the Business Day for another example) and forcing many of the ‘old guard’ to take a public stand. In almost all cases the criticism is unspecific and is being made by people who no longer occupy key positions in the party or state. However, there is a cumulative loss by those who hold central power in the ANC of moral authority. Without moral authority, hegemony must be won with patronage, manipulation, blackmail and force. The ANC is still close enough to its ‘liberation roots’ for such a changing of the guard to cause serious, even dramatic, ructions amongst the party faithful.
Finally, Jacob Zuma has been (significantly) responsible for growing ANC electoral support in Kwazulu-Natal from 33.33% in 1994 to 63.97% in 2009. The province has a population of 10 456 900 people (second to Gauteng which has 12 728 400 according to the 2011 census). Kwazulu-Natal is now a key ANC stronghold and the only province where the party’s electoral support grew during the 2011 municipal elections. More than a quarter of the party’s total membership comes from the province. “On Friday, thousands of ANC supporters wearing yellow T-shirts emblazoned with the words “Hands off Zuma’ marched in Port Shepstone on the south coast … after eThekwini did so earlier this month” – (City Press 30/03/2014). If, as we suspect, Jacob Zuma’s lifestyle and probity issues are losing the ANC a degree of support in many, especially urban, areas of the country but that his personal support is continuing to grow amongst isiZulu speakers in rural Kwazulu-Natal, the party will face the further corroding influences of regionalisation and tribalism. My suspicion is Zuma’s vote pulling power in Kwazulu-Natal peaked in 2011, but only May 7 will put that to rest one way or another.
Jacob Zuma’s financial advisor Shabir Shaik was sentenced to two 15 year terms in prison after he was found ‘guilty of corruption for paying Zuma 1.2 million Rand (US$185,000) to further their relationship and for soliciting a bribe from the French arms company Thomson-CSF, as well as guilty of fraud for writing off more than R1 million (US$154,000) of Zuma’s unpaid debts” – http://en.wikipedia.org/wiki/Schabir_Shaik_trial accessed on 30/03/2014 at 21h17 CAT
This is a quick aside before getting onto the more riveting topics of the May 7 elections, service delivery protests (and their search for a Gene Sharp handbook as well as the predictions of the Davies J-curve), the platinum strike, Julius Malema’s sequestration hearing in the North Gauteng High Court this morning (and the pressing matter of whether this could bar him from becoming a member of parliament in terms of section 47c of the Constitution) and the truly interesting Ipsos comparisons of the demographic characteristics of supporters of the ANC, the DA and the EFF.
Out of the mouths of babes and sucklings**
Over the weekend a young, close relative of mine wondered aloud why South Africans continued to vote for the ANC.
The child explained to me late on Saturday night that the ruling party was an institution so obviously bereft of redeeming features that only a person on drugs could possibly continue to vote for it.
“Why don’t they vote for another party?” asked the child in exasperation.
I have to admit that while I recognised the opportunity was begging for a cautious and loving Socratic exchange, I couldn’t raise the enthusiasm to give more than an exhausted ‘who’s they‘, followed by a quick retreat and request a continuation in the morning.
The next day, having completed the obligatory 52 hours (I think that’s about how long it takes?) of newspaper reading, I found myself sitting beside the same child watching Adventure Time on television.
When the charming, nuanced, off-beat and deeply intelligent (in comparison to other media I had been consuming that morning) cartoon was over, the child switched off the television, turned his angelic face towards me and asked: “so, about the ANC …?”
I cleared my throat and gathered my thoughts.
“White settlers from Holland” I began, gazing into the middle distance with a faintly sad expression on my face, as if watching the mournful parade of our history playing out in my mind, “first came to South Africa in 1652 and many bitter struggles were fought over land and cattle.”
Jumping ahead somewhat I went straight to the nub: “On January 8th 1912, chiefs, representatives of people`s and church organisations, and other prominent individuals gathered in Bloemfontein and formed the African National Congress. The ANC declared its aim to bring all Africans together as one people to defend their rights and freedoms.”
Okay, I’m messing with you … that’s a cut-and-paste from ‘a brief history of the ANC’ on the organisation’s website.
However, I find it significant that I had to open the web page and read some of the highlights from there. Somehow the essential story, the glorious history of the glorious struggle for freedom and democracy, the dead heroes, the banners, the flags and the songs, sounded tired and clichéd and faintly hackneyed as I ran through it without much real enthusiasm.
But I still argued the toss. It was not surprising that most black South Africans who were registered to vote would still be voting for the ANC (and, btw, ‘most black South Africans registered to vote’ was still probably ‘most South Africans of voting age’ given both our demographics and our 77% voter registration). The ANC led the fight against Apartheid. The ANC has presided over massive and ongoing redress in favour of black South Africans since 1994! A few bad eggs in the leadership do not change that.
The child raised a litany of objections: ‘Zuma’, ‘Nkandla’, ‘the arms deal’, ‘police violence’, ‘judicial – and other – appointments’, ‘the diversion of billions of rand into the coffers of fat cats and the party itself’, ‘governance failures’, ‘the Traditional Courts Bill’, ‘borderline homophobia’, ‘the impending Zuma/Putin nuclear caper’, ‘growing intra-ANC violence in contestation for increasingly lucrative political jobs’ and ‘increasing state sanctioned violence’ – duh!
(I suspect the ‘child’ is imaginary, a clunky rhetorical device … also, ‘duh’ means ‘give me a break’, or ‘don’t waste my time with the stupid and obvious’ – Ed)
The child’s arguments asserting the extremely putrid state of the ruling party became louder as did my insistence that the majority of voters were not brain-dead zombies acting out a destructive and unconscious impulse.
From the vantage point of this Monday afternoon I worry that I sounded a little like a master of ANC Apologetics ; but the child, delightfully, sounded like a shorter, skinnier, cleverer and more charming Wilmot James.
I obviously didn’t answer the question why do the majority of South Africans still vote for the ANC? to the satisfaction of he who asked it – although I am equally satisfied that I can understand why a majority of normal, sane black South Africans, acting in their enlightened self-interest, might vote for the ANC.
However what I didn’t say in the argument with the child is that I am also sure that along the path down which the ANC is currently travelling, with Nkandla (the political/economic/security faction rather than the homestead) leading the way, awaits a place or a moment at which the ANC will lose the support of the majority of free thinking, free voting* South Africans. Of this I am convinced. I think that moment is some distance ahead – only conceivably first appearing in 2019.
But who walks blindly towards catastrophe, when it is visible, predicted by one’s own forecasting, evident in every stumble along the deteriorating path?
Think about the ANC as having a brand value. Think about the forces that operate within the ANC as a kind of political market. I am hopefully expectant that that market will automatically self-correct … that the brand is so valuable that the threat of its loss will trigger a protective impulse, will mobilise the many who have much to lose if their asset continues to be led and used in the manner it is being led and used by its incumbent central leadership.
Obviously the incumbent leaders of the ANC will not willingly lose control. The consequences for this particular crew would be more negative and profound than, for example, a similar loss of control was for Thabo Mbeki. Also the incumbent leadership has a security/intelligence/street-fighter thing going that could make it a vicious and dangerous opponent of any serious movement for renewal within the party.
Finally, I imagine that the fewer votes the ANC receives in the May 7 election (which I don’t see being fewer than 60% of the total) the more likely and vigorous will be an attempt to change the organisation’s current trajectory and leadership.
(I am not going to run all of that passed the aforementioned child – he will, with some justification, roll his eyes and say whatever.)
* I use the “free thinking, free voting” qualification because it is not an eternal given that we will remain, as we have been (only briefly, since 1994) free, or relatively so, to think and vote as we please.
**’Out of the mouths of babes and sucklings’ comes from Matthew (21:16) recalling the words of Jesus, who was in turn referring to Psalm 8 – from the King James Version, a widely admired (for its literary value) English translation of the Christian Bible … that’s for any readers in a geographical, cultural and/or technological location so remote that even Google cannot help them as it has helped me fake that I knew the full origin of the phrase before I sat down to write this morning.
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
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.
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.
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).
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.
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”. 
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.
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”.
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.)
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”.
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.
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.
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
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 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
- 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.
- 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.
- 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.
- 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
- 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.
- 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).
- 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.)
… 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.)
|1||Dlamini-Zuma, Nkosazana Clarice||F||2921|
|11||Sisulu, Max Vuyisile||M||2442|
|12||Dlamini, Bathabile Olive||F||2423|
|13||Jordan, Zweledinga Pallo||M||2407|
|16||Ndebele, Joel Sibusiso||M||2379|
|24||Cwele, Siyabonga C||M||2245|
|25||Mokonyane, Nomvula Paula||F||2240|
|27||Dlamini, Sidumo Mbongeni||M||2213|
|29||Bhengu, Nozabelo Ruth||F||2195|
|32||Masetlha, Billy Lesedi||M||2161|
|33||Ramatlhodi, Ngoako Abel||M||2156|
|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|
|48||Xasa, Fikile D||M||1881|
|49||Majola, Fikile (Slovo)||M||1872|
|54||Cele, Bhekokwakhe Hamilton (Bheki)||M||1736|
|58||Mmemezi, Humphrey M Z||M||1679|
|59||Dlulane, Beauty N||F||1674|
|65||Yengeni. Tony Sithembiso||M||1570|
|70||Ntwanambi Nosipho, Dorothy||F||1450|
|71||Semenya, Machwene Rosinah||F||1449|
|73||Moloi- Moropa, Joyce C||F||1396|
|75||Ntombela, Sefora Hixsonia (Sisi)||F||1348|
|79||Mandela, Nomzamo Winfred (Winnie)||F||841|
I was interviewed on eCNA by the excellent Gareth Edwards yesterday about some matters relating to Mangaung, policy and succession. Catch that here.
… and here is a part of my weekly news summary from Monday morning:
- Nelson Mandela hospitalised on the eve of Mangaung conference;
- A leaked KPMG audit conducted for Zuma’s corruption trial indicates serious money from some surprising sources has flowed into the bank accounts and bonds of what Mail & Guardian is calling the “kept politician”;
- Mangaung is going to be all about economic policy – and ANC leaders are very directly signalling this, so that what is ultimately decided won’t come as too much of a shock… it is best to sit up and take notice now;
- With the presidential leadership contest all but resolved, the only interesting story is the choice between Motlanthe and Ramaphosa;
Nelson Mandela hospitalised
It only just made the Sunday papers, but: “President Jacob Zuma wishes to advise that former President Nelson Mandela has today, 8 December 2012, been admitted in hospital in Pretoria to undergo tests… As said before, former President Mandela will receive medical attention from time to time which is consistent with his age” – presidential spokesman, Mac Maharaj.
There is no direct financial market implication of Nelson Mandela’s health (he has long since stopped playing any role in relation to South African politics or policy). However, the financial markets do not list the price of every important thing. At the level of sentiment, it will be impossible to separate the growing unease about many aspects of South African politics (see below) from the failing health of the universally loved founding father of the country.
Secret audit reveals how millions flowed to President Zuma
The Mail & Guardian has placed on its website a secret September 2006 KPMG audit of fund flows into Jacob Zuma’s accounts – it is still there this morning. According to the Mail & Guardian: “The report exposes the president as a ‘kept politician’ – a financial freeloader who accepted money and favours on a routine and increasingly extravagant basis not only from his so-called financial adviser, Schabir Shaik, but also from other benefactors, including Nelson Mandela.” The report was prepared for Zuma’s now cancelled corruption trial, and has thus never been contested in court. Mac Maharaj, spokesman for Mr Zuma, said: “Much of the information that is being headlined seems to have been in the public arena already, from the Schabir Shaik trial. I’m finding it strange that it is coming up now, in this fashion.” Here for M&G report and here for the full 490 page report.
The report should not derail Zuma’s re-election at Mangaung because, as Maharaj so clearly points out, only a few details within the 400-page document are ‘new’. The ANC elected Zuma as its president at Polokwane in December 2007 at the height of public interest in the details of the recently withdrawn corruption charges against him. These details did not stop the ANC then and are unlikely to influence the Mangaung outcome now. The report does add to the gloom around the apparently out of control cronyism at the heart of the ruling party – leaving us with low levels of confidence that Zuma and his government might be able to address the serious challenges facing the country and the economy.
Economic policy is where Mangaung action is – and most of that will be about resources
You had to be watching carefully, but the top ANC leadership signalled over the weekend that economic policy will shift at Mangaung and, further, that too much attention on the leadership struggle will cause observers to miss what’s important. In the Sunday Times, Gwede Mantashe argued the toss in a story headed “Mangaung is all about the economy”; in the Sunday Independent, Jesse Duarte did the same under a headline “Mangaung will clear all confusion over ANC policy”; and in the Mail & Guardian, Jeff Radebe wrote “Mangaung turns on economics”.
In all of these stories (coordinated in line, length, content and ordering, but presenting themselves as independent pieces by these top ANC leaders), it is argued that the National Development Plan co-ordinated with the New Growth Path is central to what “needs to be done”, that state intervention is the key to job rich and equitable growth, that mineral policy is the central area of change that can be expected at Mangaung, that BEE needs review, that land reform needs radical intervention, and that the ANC must be rebuilt to guide these processes.
City Press looked more closely at the State Involvement in the Mining sector document and pointed out that private sector companies were lobbying hard against the ANC’s intention to add a resource rent tax and to control the price of mineral inputs into the domestic economy – but that they (private sector companies) are unlikely to stop or significantly curtail the ANC’s plans.
So what? As we have stated (perhaps repetitively), the ANC is likely to recommend a rise in taxes in mining (or rather a shift to a resource rent tax regime that will have the same impact) and it (the ANC) is likely to decide on taxes on “unbeneficiated” mineral exports to secure supplies for domestic manufacturing combined with price controls as a stimulus to domestic manufacturing. And this is just in relation to the mineral sector. There are plans for state intervention across several sectors and we believe these will have serious impacts on investment in South Africa – many negative, some positive, but generally different across sectors.
Cyril Ramaphosa versus Kgalema Motlanthe
All the newspapers reviewed here (and several online sources) discussed in detail the fact that the Zuma camp has essentially nominated Cyril Ramaphosa for deputy president – making him a dead certainty for president in 2017 (if it plays that way).
So what? The Mangaung presidency issue is settled and the only interesting bit (as far as the electoral process is concerned) is the election of the deputy president.
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: to ensure that the corruption charges do not return and that the candidate and his continued ownership of his (and his camp’s/family’s) acquired assets remains secure even after Zuma has left office.
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 charged for the original corruption charges?
I think Ramaphosa might, although I would not feel entirely confident that the Zuma camp could not construct a deal that keeps him (Ramaphosa) beholden long enough to ensure the achievement of the imperative stated above.
I don’t think Motlanthe would pursue the corruption charges. He is 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 taking down Polokwane. I cannot see Motlanthe as the author of such a story.
As things stand, the nominations indicate that Ramaphosa will be elected as Zuma’s deputy. However, a last-minute ‘unity’ compromise might easily allow the Zuma camp to appoint the probably more pliable Motlanthe as deputy.
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?
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
|Limpopo||Conference delayed – violence etc.|
|Western Cape||Conference delayed – disputes etc.|
|Northwest||Conference delayed – shots fired etc.|
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.
I comment on, and interpret, incidents like the shooting by police of at least 35 strikers at Marikana yesterday.
Even as the gunfire fell silent the price of Lonmin shares fell and the price of platinum spiked in response to supply concerns.
It’s what I do for a living – the people that pay my bills are paying for information or interpretation that might have an impact on the value of things they own, might sell and/or might buy in the future.
What I say to them is a tiny part of the universe of facts and opinions that these individuals and institutions consider when making investment decision to make money and/or prevent losses for the owners of the funds under their care.
But when I had finished my cursory analysis and sent it out – by 05h30 this morning – I busied myself with the difficult business of waking my children and preparing them for the school day.
At some point I shouted across the room for the younger one to switch the channel from Phineas and Ferb to eNews so I could catch the latest from Marikana.
The timing was perfect. We all watched as a line of flack-jacketed, SWAT-style policemen advanced. Suddenly a group of tatty men stormed around an object … a car perhaps … towards the police.
The police opened fire, rifles on full automatic, and the men running towards them simply collapsed in the exploding dust, loose limbed, their ragged bodies sprawling.
A voice, a white Afrikaans voice – but I am not sure why that is significant aside from the fact that no-one I could see amongst the police or the protesters was white – shouted repeatedly: “cease fire, cease fire, cease fire”.
I was horrified. I looked towards my 12 year old son. His mouth was frozen wide open, his face a study of incomprehension.
It was over too quickly for me to do anything about it … I was, frankly, too shocked myself to ameliorate or in some way decode what we had seen.
Sometimes it’s not the facts that count, but how we line them up:
The massacre yesterday has no precedent in the new South Africa.
The precedents are all in the bad old days, when the National Party’s security establishment fired on those taking to the streets and threatening the political elite of the day.
Throughout the platinum sector there is militant and growing opposition to the hegemony of National Union of Mineworkers (Num).
Num has drifted towards representing white-collar workers – the traditional terrain of Solidarity and Uasa.
Num is the backbone of Cosatu’s support for the ANC and that union is also a key pillar of support for Jacob Zuma’s re-election at Mangaung.
It doesn’t matter how ‘true’ the implicit story implicating the political elite in this particular incident is.
It’s clear the workers on the hill were armed. They fired at police. And at a helicopter.
Who can blame the command structure for arming the officers with automatic weapons in this environment?
Can you imagine how scared – and angry – the individual members of the force were as the panga and iron bar carrying strikers rushed towards them?
But those facts are not going to be important over the next few weeks and months.
What’s going to matter is that Num has successfully been portrayed as a sweetheart union, increasingly concerned with white-collar workers, and increasingly comfortably with the benefits that come from being romanced by management.
It is going to matter that Zuma-supporting Num appears to have abandoned the least sophisticated workers – workers that use muti from sangomas to protect themselves from police bullets – to a violent, millennial-style organisation like Amcu.
This is what I Here are a few paragraphs from the conclusion of what I said to my clients this morning:
- It appears to me that this is the prism through which the public and the press is likely to understand what happened yesterday. In this narrative Jacob Zuma will be portrayed as the villain, presiding over the gradual abandonment by the ANC of the most marginalised and vulnerable citizens. When political formations inevitably emerge to give voice to those disaffected groups, policemen armed for war will be ordered to use all necessary force to defend the support base of the incumbent political elite.
- Expect anxiety about the breakdown of the political and social mechanisms that have traditionally allowed our society to negotiate the complicated disagreements and clashes of interest with which it is beset.
- Finally, this incident is likely to be used against Jacob Zuma in the run-up to the political contest at Mangaung. It might not be strictly fair, but the narrative is compelling, and Zuma’s enemies and competitors will make everything they can of his vulnerability here.
There is little I can say of any use to the child with whom I watched the visuals on eNews.
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.
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
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.
Occasionally I publish slides from a current presentation series and here are a few from something I am busy with called: “The Second Transition – SA politics and policy somewhere twixt hither and yon”.
The general idea is the ANC government is determined to move beyond the ‘transitional’ arrangements that it agreed to in 1994 and strike out boldly towards some undefined, but more profoundly transformed future.
Then, taking some liberties, I summarise what the ANC is “really” (in my humble opinion) saying in motivating the documents:
I then set out on the difficult task of attempting to assess whether the ANC documents actually propose anything as thoroughgoing as the initial motivation implies.
Frankly, the answer is “no”; although the proposals are both worrying in tone and in how contradictory and “bitty” they are.
The best formulated document is the “Maximizing the Developmental Impact of the People’s Mineral Asset: State Intervention in the Minerals Sector (SIMS) – document (get a link to that here). It contains a thoroughgoing set of proposals that change the tax system for mining and propose a complicated set of upstream, downstream and sideways linkages for the industry that will create a new set of burdens and obligations (not all bad) for the mine owners. (My own feeling about mineral resources is that these are “non-renewables” and government is obliged to get the maximum developmental benefit out of them before they are lost forever – but that is just by the way.)
Almost every other document – and there are 12 in all – meanders between
- being meaningless wish-lists,
- statist and authoritarian blueprints to bully and control and
- well researched and argued guides to fixing key aspects of what is wrong with our society
Almost all the good stuff is lifted body and soul from the meticulously researched National Development Plan with its focus on the 9 challenges of
- widespread unemployment
- ailing infrastructure
- low standards of education
- exclusion of the poor from mainstream development
- a resource dependent economy
- a failing public health system with a large disease burden
- inept public service provision
- widespread corruption and
- societal divisions.
My presentation itself does not make strong predictions on how far the ANC will get with its deliberations … although what is clear is that policy discussion this whole year will be drowned out by the Mangaung election noise. It is is going to be difficult to ascertain any real direction through the clamour of the struggle to re-elect Jacob Zuma.
Leaving aside all the slides that deal with the actual documents, I do, however conclude by asking some questions of our key players … and I include those slides here for your interest:
As the months go by, I will hopefully have time to flesh out some of those question.
But for now I am in the final days of the road show trying to make sense of the mess of proposals and hints in the documents, which span issues as diverse as fracking the Karoo, IDZ’s to SEZ’s, the Treasury versus EDD versus DTI, local procurement fantasies, some excellent fixes of BEE from Rob Davies, the lonely excellence of the Gordhan and Marcus and infrastructure looking more and more like the ANC’s one-trick-pony.
Well it is certainly not Julius.
Last night his expulsion from the ANC and the ANC Youth League was confirmed by the ruling party’s national disciplinary committee.
His ‘fixer’, secretary-general Sindiso Magaqa, was suspended for a year – making any attempt to ‘rule-by-wire’ difficult. The appeals committee chaired by Cyril Ramaphosa also confirmed the three-year suspension of the other key Malema ally, Floyd Shivambu.
Malema is out of the game and I don’t expect to hear much from his traditional defenders, Tokyo Sexwale, Thandi Modise, Mathews Phosa, Fikile Mbalula, Winnie Madikizela-Mandela and Tony Yengeni. They are going to be exploring other strategies … more about that below.
Malema has been sunk by a combination of his own hubris and of bad luck. He might still be greeted like a rock star by striking Numsa workers, but he just doesn’t have the gravitas to coalesce a radical alternative to the ANC around himself.
I expect he is going to be busy trying to keep himself out of prison on tax evasion and corruption charges for the next several years. It’s a stitch-up, but he has made so many mistakes that it has been a relatively easy one.
The strategy of his core group is going to have to be to make as much noise in the lead-up to Mangaung as possible. They are good at this, earning their colours in the trashing of Mbeki in the lead-up to Polokwane. But that time around they were coached and backed by Zuma and his cronies and by the SACP and Cosatu … which makes the Nkandla Crew’s huffy outrage at his conduct a little difficult to swallow … this time Malema and friends are on their own and their backs are to the wall. I cannot see them achieving a momentum that could realistically effect the outcome of the Mangaung contest.
So what could threaten Zuma?
The word on the street is that with KZN and the Eastern Cape wrapped up Zuma is unassailable going into Mangaung.
But Mangaung is a long way away and the street is not always right. Our TV screens have been resplendent with the big-boned ladies cutting Zuma cakes and singing Zuma songs – but in our parochial soap opera version of Götterdämmerung the chubbier maiden hasn’t even started singing. (Here is a discussion of “it aint over till the fat lady sings”.)
I have assumed that the main threat to Zuma’s relection at Mangaung is the unlikely possibility of the National Prosecuting Authority reinstituting fraud and corruption charges against him.
This remains a threat, but a more serious and immediate one seems to be emerging around what appears to have been a widespread sacking by Zuma’s security chiefs of at least one secret fund allocated for clandestine anti-crime operations.
The tip of this iceberg is the accusation that crime intelligence boss and apparent Zuma ally Richard Mdluli had his children, wife and girl-friends listed as agents to be paid out of the fund.
The next layer of the iceberg sloshing at sea level is the accusation that police minister Nathi Mthethwa used the fund to pay for aspects of the renovation of his country home.
Below the surface is a looming mass of allegations that many, perhaps most, of the ANC security commissars – the closest of Zuma’s allies – have been using this and similar funds as automatic teller machines.
It is the fact that Richard Mdluli has been reinstated – despite these serious corruption allegations and even more serious allegations that he murdered a love rival – that rings the really big red alarm bells. I think Jeremy Gordin hinted the loudest and the most eloquently that it is definitely worth considering that the protection is coming from the very top and must be motivated by the possibility that Mdluli has the goods on Zuma … catch that story here.
There is no successful drawing of a link from this scandal directly to Zuma, but if I look at the renovation of his house and the character of the empire he is building in Nkandla I must wonder whether the proceeds of the looting of this intelligence fund – and of a host of other stores of cash dotted about the security establishment – have flowed upwards and if they have, how high?
If Zuma is derailed – and I have this as a “Black Swan” possibility only* – Kgalema Motlanthe is waiting in the wings. I am under the impression that the Motlanthe alternative is being deliberately kept alive and viable because of the real risks of the main candidate drowning in his own sleaze.
Of course there have been consistent attempts to flick dirt in the general direction of Motlanthe – and some of it has stuck … and some of that for good reason. He was central to efforts to secure oil allocations from Saddam Hussein for ANC donor Sandi Majali and ‘has never fully answered questions about his role in the Iraq/UN oil-for-food scandal as well as the Pamodzi loans, hoax emails and Bell Helicopter parts for Iran scandals/disputes’. There is a useful ‘dusting off the alternative’ article on Motlanthe in last week’s Mail and Guardian … catch that here.
(Note: I realise from the comments section below that it is possible to think that I am suggesting that the transmission mechanism by which such a corruption crisis could bring down Zuma is via a court case. That is not what I meant .. anyway that would take too long to play out to impact upon the process. Such a crisis could bring Zuma down by motivating a broad coalition of groups and individuals within the ANC – specifically those who have been backing Motlanthe, but with new anti-corruption allies … and ANC patriots desperate to save their organisation – to choose the alternative. I think there is much militating against this outcome, but I discuss that below.)
A Motlanthe alternative would be unlikely to risk its own credibility by treating Malema any differently from how he has been treated by the ANC disciplinary process.
The final line of appeal is to the National Executive Committee of the ANC – but there Malema’s potential allies need to concentrate on battles they can win … not on hopeless causes.
Looking towards a further horizon, perhaps 10 or 20 years on, no-one should be surprised to see Julius Malema – older, wiser and more dangerous – back in the game. His instinctive feel for the tactics of political mobilisation are unparalleled – it is his grasp of strategy and principle that have let him down this time around.
But for now the game moves on and our attention needs to shift away from the activities of those who wish the President harm and onto the harm he might do/have done to himself.
* A “Black Swan Event” is a metaphor developed by Nassim Nicholas Taleb in his 2007 book The Black Swan and refers to events with a disproportionately high-impact which are both hard-to-predict and rare.