Mpumelelo Mkhabela

Zuma has become the risk he warned against

2016-11-04 11:38

WATCH: Zuma in Zim day after #StateCaptureReport release

2016-11-03 16:02

President Jacob Zuma landed in Harare, Zimbabwe for bilateral meetings on Thursday morning.WATCH

There was a time when the markets did not accept that President Nelson Mandela could be ill. A rumour that he had flu would unsettle markets and cause our precious rand to depreciate.

Towards the end of his term of office, dark scenarios were painted about what would happen to our Republic when Mandela eventually left office or if God recalled him.

The reason for the unease was simple: investors had confidence in his ability to run the country well even under difficult economic conditions and an apartheid legacy that needed to be crushed.

There was an urgent matter of post-apartheid nation building and reconciliation – stitching together disparate racial and ethnic groups into one nation under one supreme law of the land.

Mandela had proven himself capable of leading the nation building project that was necessary to instill investor confidence after years of stagnation due to apartheid isolation and violence.

Investors saw the establishment of the new order as the beginning of the end of political risk that apartheid posed to their investments. Although they didn’t aggressively invest as expected post-1994, a solid base was created by the new democratic government for them to do so.

When Mandela eventually left office, those who thought the country collapse were disappointed. Thabo Mbeki proved to be the best under the circumstances at the time to take over.

He continued with the project of re-engineering the state machinery to instill confidence in black people’s ability to govern and fix the country’s finances that we left in shambles by apartheid.

The bulk of our governance, legislative instruments and other institutional arrangements were enacted under Mbeki’s leadership. He even tried, notwithstanding his many ill-advised decisions, to export some of the domestic initiatives. His presidency gave meaning to the articulation by international relations experts that foreign policy is the outward expression of domestic policy.

Mbeki was frustrated when investors failed to appreciate government’s efforts to deal with the legacy of apartheid. Many would remember his irritation with Anglo-American boss Tony Trahar who had said political risk in South Africa had “not diminished”. And when petrochemical giant Sasol said black economic empowerment was a “risk”.

Before his term expired, some people painted dark scenarios about what will happen when Mbeki goes. This time around, the doomsayers might gleefully feel vindicated.

President Jacob Zuma has been declared – correctly so – as a risk to the economy. The reason is that his decisions on matters of governance are seen as arbitrary, lacking in rationality and personalised to favour his family and friends. Mbeki debated policy questions with investors who claimed they were a risk. Zuma, on the other hand, is regarded as a risk himself.

The minutes of the meeting Zuma had with Public Protector Thuli Madonsela on state capture – a scheme designed to overthrow the will of ANC voters – are revealing and vindicate investor fears.

Asked why he wanted to postpone answering questions if his version would be similar to one he had provided in public, he said: “I had to say anything [to journalists] without serious thought”.

He also admitted having deliberately ignored the request from Madonsela to comment on the allegations. At some stage, he said the offer by the Guptas to appoint “the fellow” Mcebisi Jonas as finance minister had nothing to do with him. Yet, to his own admission, the issue of state capture is a “big issue” in the country and it’s “not new”.

Why he wanted to postpone dealing with a “big issue”, why he would respond to journalists on such an issue “without serious thought”, why he ignored invitation by Madonsela to comment and why he would call his own deputy finance minister condescendingly as “the fellow” is mind boggling. But it’s typical of someone who does not want to be pinned down. Evasiveness is his grand strategy. Obfuscation his tactic.

It makes sense for investors to see him as a risk. Whenever a court or the Public Protector makes a finding against him, the markets cheer and the rand appreciates in value. After the Constitutional Court found him to have failed to defend and protect the Constitution, the rand strengthened. The markets were anticipating his removal from office.

Following the North Gauteng High Court ruling that the more than 700 charges of corruption and racketeering arising from his relationship with fraudster Schabir Shaik must be reinstated, the markets cheered and the rand gained value.

Similarly, when the same court ruled that Public Protector Thuli Madonsela’s state capture report must be published, the rand strengthened against major currencies. The markets expect that adverse findings would hasten his departure from office.

Credit rating agencies don’t look up to Zuma for assurance. They look at institutions such as the National Treasury, the courts and the Public Protector to determine whether the country can be trusted to manage its finances. They look at South Africa’s “institutional strength” and openly applaud when these institutions make a finding or take a stand against Zuma.

Zuma is seen as a risk to the National Treasury. So, markets cheer at the National Treasury’s staff’s resistance to Zuma’s interference. An odd situation has developed where the minister responsible for the National Treasury is held in higher regard than the person who appointed him.

No powerful shower will clean Zuma of the risk embedded in him in the next two years. As a risk, he can no longer act in the interest of the country. Everything he touches is viewed with suspicion.

Even the people he appoints, including the honest ones, are at risk of losing their integrity because he typically selects them irrationally. It takes a lot of hard work for people appointed by Zuma to prove themselves worthy of their tasks. But some would go on to prove skeptics right that their appointments were not to meant to serve the public but Zuma.

The Zuma crisis raises questions about why he became what he is: a risk. In 1989 he participated in the secret talks between ANC and a group of Afrikaner leaders in London.

In his book, The Endgame: Secret Talks and the End of Apartheid, Willie Esterhuyse, who participated in the talks, refers to Zuma's remarks about the political situation in Africa.

Zuma said: “Africa has a disease. There are too many one-man shows. And a lot of corruption.”

Fast forward to 2016, South Africans are angry that Zuma has become the risk that he warned against many years ago. Like an injured, grumpy predator, the longer he stays in office the riskier he becomes.

Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.

Read more on:    jacob zuma  |  state capture  |  corruption


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