Morning clouds. Mild.
Max du Preez
If the pendulum swings too far and too fast, the whole contraption collapses.
The pendulum in the ANC and the Cabinet has indeed swung after Nenegate on December 9 last year and the economic realists now undoubtedly have more strategic power than the Zuma inner circle.
But the expectation of especially the business sector that minister of finance Pravin Gordhan has carte blanche and that tomorrow’s budget will represent a fundamental shift away from previous ANC position is perhaps unrealistic.
READ: Gordhan's budget looks to steer SA from junk rating
Gordhan’s strong position is due to the catastrophic aftermath of the firing of Nhalnhla Nene and the appointment of Des van Rooyen, the vulnerability of the economy and the national obsession to avoid the country getting downgraded to junk status.
Gordhan thus has the support of the more sober, pragmatic minds in the ANC, led by deputy president Cyril Ramaphosa, but he is not as untouchable as some commentators believe. He has no constituency other than his obvious talent, skills and experience at a time we need that most at the Treasury.
There can be little doubt by now why Nene was fired and Van Rooyen hired. Nene stood up to the Zuma inner circle and their friends and resisted their abuse of state owned enterprises, tenders and contracts.
The Zuma grouping was irritated that a little guy like Nene tried to prevent them from plundering the Treasury. Van Rooyen was the choice of the Premier League, a Zuma support structure led by the premiers of the Free State, Northwest and Mpumalanga, and of their Gupta allies.
It has since become known that Van Rooyen had hired two Gupta insiders weeks before his appointment to serve as his advisers at the Treasury.
READ: Named: Van Rooyen’s two Gupta 'advisers' who almost hijacked SA Treasury
Zuma had obviously overplayed his hand badly and we can state today that it was his biggest blunder in his political career, probably the beginning of his premature end as president.
But we would make a grave mistake if we think the incredibly wide network of patronage that Zuma has established the last seven years was suddenly emasculated. We’re talking many billions of rand and serious vested interests here, far too much to simply let slip away.
Even after the power shift in December the Zuma-Gupta complex steamed ahead unperturbed with contracts, appointments and transactions in the mining and other industries.
The Zuma agents in the National Prosecuting Authority and the Revenue Service has in similar vein continued with their shenanigans as if nothing had changed.
READ: Battle lines drawn at Sars as Moyane 'defies' Gordhan
Gordhan is a brave man. He has been tickling the lion’s testicles for weeks now with his statements on corruption, nepotism and the management of state owned enterprises. He even went as far as snubbing the Guptas and ordering their ties to state institutions to be probed.
He must surely be the Zuma-Gupta Complex’s Enemy Number One today. (Could Zuma’s statement yesterday that Van Rooyen was the best-qualified finance minister ever appointed be a sideswipe at Gordhan?)
READ: Van Rooyen was highly qualified for finance job, says Zuma
Gordhan obviously understands how precarious his position is. He has spent his entire adult life inside the ANC and has witnessed many power struggles and faction fights.
He simply doesn’t have enough maneuvering room to announce large-scale privatization and sharp cuts in social spending as the business sector is demanding, even if he wanted to.
The popular demand, also from inside the ANC, is for radical economic transformation. Gordhan can’t go too far the other way. On top of that, we’re a few months away from the local elections and his party is under severe pressure.
READ: Gordhan's Gupta snub booster for budget - economist
We can expect that Gordhan will push the boundaries of what is possible, but we have to understand where those boundaries are. If he goes too far beyond them, he will walk into a wall of resistance.
Gordhan’s strongest argument is that if we didn’t take unpopular steps now, we don’t only face junk status, but the real possibility that we will soon have to, cap in hand, to ask the International Monetary Fund to bail us out.
The IMF’s conditions for such a bailout will be much, much worse than anything Gordhan could come up with tomorrow.
For all the Budget action visit Fin24's Budget Special.
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