Political risk analysis: Major shifts and key players

2019-06-14 06:00
Cyril Ramaphosa and Ace Magashule. (Gallo Images)

Cyril Ramaphosa and Ace Magashule. (Gallo Images)

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This briefing note covers the period June 14 tot 21, 2019 and analyses the political risk environment in South Africa ahead of the state of the nation address on June 20, 2019. 

Please note this document is meant only for subscribers to News24’s Friday Briefing.

The analyses contained in the briefing note is based on News24’s investigations, reportage and analysis over the past week.

I. Current context:

Reconfiguring the state

Since the election of May 8, 2019, President Cyril Ramaphosa has attempted to consolidate his hold on power in party and state by reconfiguring his government and utilising internal party processes to advance his reformist agenda.

In government his slightly smaller national executive and omissions from Cabinet have led to a number of high-profile exits from Parliament, including remnants from the state capture era such as Bathabile Dlamini and Nomvula Mokonyane. He has retained key ministers such as Tito Mboweni (finance) and Pravin Gordhan (public enterprises) despite internal and external pressure not to. Both are key in his efforts to stabilise the economy, rein in spending and dismantle the vestiges of corruption.

Governance 

South Africa’s economy is in a parlous state, with GDP having contracted by 3,2% year on year in the last quarter and rating agencies warning those numbers are growth negative.

Parliament is being established with MPs undergoing induction sessions, the rules committee meeting and chief whips mapping out the legislature’s activities. Induction sessions have however been marred by EFF disruption, which could be a harbinger of things to come.

The National Prosecuting Authority (NPA) under the leadership of Shamila Batohi has also kicked into a higher gear, with Batohi reviewing the SARS “rogue unit” case brought by Tom Moyane and the new investigating directorate working on Bosasa.

The ANC

Inside the party the internal conflict between (broadly, but not definitively) the reformist grouping and (broadly, but not definitively) the rent-seeking grouping exploded into public when Ace Magashule, the party’s secretary-general, openly challenged Ramaphosa during the debacle around the South African Reserve Bank. The party subsequently decided to launch an investigation into Magashule and others’ involvement in the formation of parties to oppose the ANC in the recent election.

II. Major shifts

The Public Protector

The Public Protector, Busisiwe Mkhwebane, is emerging as a major political player with her continuing investigations into Ramaphosa and Gordhan, while eschewing allegations of state capture in the public domain and revelations at the judicial inquiry into state capture (the Zondo commission).

She has made adverse findings against Gordhan in an almost decade old matter relating to a pension payout to a former senior official of SARS and is seemingly preparing to make a similar finding against him in an investigation into SARS’ so-called “rogue unit”. Gordhan has taken the former on review, arguing in court papers that she is “stunningly incompetent”.

Mkhwebane has also notified Ramaphosa that she is preparing to make an adverse finding against him after a complaint by the DA about a donation of R500 000 to his ANC leadership election campaign and his answers in Parliament about the matter.

She however received a major setback when her exoneration of Magashule and others allegedly involved in the Estina dairy project was set aside by the High Court, who also questioned her competency. And the Constitutional Court is also set to rule on an application by the SARB to declare that she abused her office when she investigated the SARB and Absa.

The challenge for the ‘Ramaphosa faction’

Mkhwebane poses a particular challenge to those aligned to Ramaphosa. Her office was strengthened by a series of judgments in its favour during the term of her predecessor, Thuli Madonsela, most notably in the Constitutional Court’s judgment in the Economic Freedom Fighters matter. That judgment emphasised that the office must be respected and that her findings are binding.

Despite two court judgments against her, a third on review and a Constitutional Court judgment that’s in the offing, her opponents will have to abide by her findings and accept that she will be in office for another seven years, unless she is removed after a parliamentary inquiry.

Findings against Gordhan, one of Ramaphosa’s trusted lieutenants, as well as the expected adverse finding against Ramaphosa, have already served to embolden their opponents (which we deal with later). Mkhwebane has in recent weeks started to push back against criticism, threatening to sue indiviuals who “disrespect” her office and taking to social media to defend her reports and decisions.

If Mkhwebane’s investigations and findings into Ramaphosa and Gordhan stand it will severely damage their political authority and standing inside government and the ANC to lead the reformation process. It will also provide a foundation from which they will be attacked.

Luthuli House

Rampahosa’s plans to roll back the effects of state capture are premised on his control of the party. His composition of Cabinet is the product of compromise, horse trading and realpolitik at party HQ.

There have been significant shifts recently, all of which are directly related to the continuing contest for power in the party. Magashule, who openly contradicted Ramaphosa around the SARB, presents a clear and present danger to internal stability. He is however the subject of an internal investigation to be led by former caretaker head of state Kgalema Motlanthe. Although this could present an opportunity for the Ramaphosa faction to remove Magashule, the reality is much different. Magashule’s office – staffed by loyalists such as Carl Niehaus – not only provides logistical support to the investigation, but the terms of reference were signed off by Magashule and the report will be submitted to him too.

In addition, deputy president David Mabuza has managed to “clear” his name after a dubious and questionable vetting process managed by the party’s integrity commission. Because there were no official pronouncements against him he was reinstated as the country’s deputy president despite various rumours of corruption and political murders linked to him. He seems determined to position himself to succeed Ramaphosa.

Lastly, the ejection from Cabinet of disgruntled and disgraced Zumaïtes like Mokonyane and Dlamini and their resignation from Parliament means that they have more space to reorganise and regroup opposition to Ramaphosa and company. Dlamini has already attacked Gordhan, accusing him of colluding with banks and playing into the resurgent Bell Pottinger narrative of “radical economic transformation” and “white monopoly capital”.

The EFF

The populist party founded by Julius Malema is intimately involved in the onslaught against Ramaphosa and Gordhan, with complaints by them forming the basis of Mkhwebane’s investigations against Gordhan.

The organisation, that lodged an application in support of the former public protector in the Nkandla matter, is now using that judgment to hammer both Ramaphosa and Gordhan, vociferously supporting Mkhwebane’s investigations and reports.

Malema and the EFF have changed their positions on both Mkhwebane and Gordhan, withdrawing their support for one while emerging as a crusader for the other.

Given the legal standing of Mkhwebane’s reports the EFF will use them as a basis from which to weaken Ramaphosa and Gordhan, who will remain under attack from elements inside their own party.

III. Events to look out for

The State of the Nation Address, June 20, 2019

Ramaphosa will have to make a strong statement in his first address to Parliament after his proper election. His government has a major job on its hands and both the citizenry, markets and investors will be looking at signals of intent in regards to the rule of law, the economy and governance reform.

The release of the Public Protector's report into Ramaphosa

Mkhwebane has given Ramaphosa until June 21, 2019 to respond to her preliminary findings. The president has however indicated that he wants to cross examine individuals that she has interviewed, which will include DA leader Mmusi Maimane and EFF deputy leader Floyd Shivambu. 

The debate on the president's address and his response

Opposition parties will have their say on Ramaphosa's address on June 25, 2019, with his response to the debate to be delivered the following day. It will be instructive to note how both government benches and the opposition react to his plans.

The Constitutional Court's judgment in the matter between the Public Protector and the SARB

The country's apex court has been sitting on judgment since November last year. Mkhwebane wants the court to grant her direct access to appeal the High Court's earlier judgment setting aside her report on the SARB and Absa. The central bank meanwhile is asking a declaratory order saying she abused her powers and must pay costs. There seems to be movement in Braamfontein and judgment could come any day.

IV. Main player and key questions to consider

Ramaphosa

The president will seek to consolidate his state power and keep Luthuli House in check. Will he be more visible, or will party unity dominate his decision making process?

Magashule

The ANC's top bureaucrat is under increasing pressure, with an official investigation into his affairs underway. Will he be able to resist and how will he try to impede the inquiry?

Kgalema Motlanthe

The former caretaker president will be leading the investigation into Magashule. The inquiry however will receive logistical support from Magashule's office and he will also report to Magashule. Will he be able to remain independent?

Batohi 

The national director of public prosecution is deeply aware of the public's desire to see justice being done. But she has to weigh it up against the NPA's battered image and she knows a failed prosecution first up will be damaging. Who will be the first high-profile prosecution?

Gordhan

The public enterprises minister is fighting a battle on two fronts: one political, the other with state-owned enterprises. He is the target of a sustained campaign by Mkhwebane and the EFF, while he has lost the CEOs of both Eskom and SAA. He can survive politically, but can he save those two embattled parastatals?

Tito Mboweni 

The eccentric minister of finance has a herculean task ahead of him. He must try and revive an ailing economy with one hand tied behind his back by ANC internal politics and alliance dogma. Can he do enough to stave off another ratings downgrade?

Mkhwebane

As mentioned earlier, she has emerged as a central political figure and seems intent on boring in on Ramaphosa and Gordhan. How long before she becomes the subject of a parliamentary inquiry, especially given the two High Court judgments against her?

Read more on:    anc  |  ace maga­shule  |  ramaphosa  |  kgalema motlanthe  |  cyril
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