Zuma’s move sparks anger
President Jacob Zuma's shock move to replace finance minister Nhlanhla Nene may finally erode his support.
|||Johannesburg - Jacob Zuma’s decision to replace his finance minister with a relative unknown is the biggest in a series of controversies and scandals that have marred his more than six years as South Africa’s president. This time, the impact on the economy may finally start to erode his support.
Zuma’s announcement late Wednesday that lawmaker David van Rooyen would replace Nhlanhla Nene sparked public outrage and drove the rand to a record low against the dollar, while stocks slid and bond tumbled. #ZumaMustFall was the top trending Twitter hashtag in South Africa and talk shows were flooded with calls for Zuma to resign. The Congress of South African Trade Unions, the country’s largest labor group and staunch supporter of the ruling African National Congress, said it was “shocked and disconcerted.”
“It’s a disaster,” said Pierre du Toit, a politics professor at the University of Stellenbosch. “The decisions he is taking are those of a man who doesn’t understand that his own interests are tied to that of South Africa within a global political economy. He doesn’t understand the world we are living in.”
Economy flounders
Africa’s second-largest economy has floundered since Zuma, a former intelligence operative with no formal education, took power in May 2009. The government has introduced a series of laws that companies say discourage investment. Policy decisions, such as the capping of university fees, are taken without proper budgeting. And key state-owned companies have suffered a management vacuum and wrung up massive losses.
“A decision of this magnitude with such bad timing will have consequences for the president,” Daniel Silke, director of Cape Town-based Political Futures Consultancy, said by phone. “He is likely to face a further erosion of support from moderate business interests within the ANC, who themselves will be damaged by economic instability.”
While many government entities are largely dysfunctional, the National Treasury is well regarded, and Nene and his two predecessors, Pravin Gordhan and Trevor Manuel, were widely respected. Zuma hasn’t given a reason for replacing Nene, who held the post for just 19 months.
Zuma crosses line
“The government has crossed a line which it hasn’t crossed for the last 20 years,” Steven Friedman, director of the Center for the Study of Democracy, said by phone from Johannesburg. “This is really effectively the first finance minister to be fired since 1994. The accurate perception is that the reason he was fired is that he was doing his job, insisting on fiscal discipline.”
While Zuma announced in February that the government had taken a decision to build new nuclear plants, Nene insisted that South Africa had to be able to afford them. Nene also clashed with the chairwoman of South African Airways, Dudu Myeni, a former schoolteacher who also heads Zuma’s charitable foundation, after he refused the national carrier permission to restructure a plane leasing deal.
“It is common knowledge that Nhlanhla Nene sought to rein in excessive government spending and was causing too much of a blockage for President Zuma in respect of the nuclear procurement deal and SAA,” Mmusi Maimane, the leader of the main opposition Democratic Alliance, said by e-mail. This is “yet another example of how President Zuma puts himself first and the country second.”
Political scandals
Zuma has shrugged off a myriad of previous political scandals. He was fired as deputy president in 2005 after being charged with taking more than 700 bribes from arms dealers, but the case was dropped just weeks before he was appointed president. Zuma, a polygamist with four wives, was acquitted of rape charges and admitted he fathered a child out of wedlock with a friend’s daughter. More recently he’s been accused of squandering taxpayers’ money in a R215 million ($14 million) upgrade of his private home. He denies any wrongdoing.
In 2013, family friends of Zuma, the Guptas, flew 217 people in a chartered jetliner to the Waterkloof air-force base in Pretoria for their niece’s wedding. A government report into the scandal that became known as “Guptagate” concluded that the landing had been authorised because Zuma’s name was falsely invoked.
The president’s power stems from his dominance of the ANC, which has run the country since apartheid ended in 1994. He has appointed allies to key posts and shored up his popular support by extending welfare grants to more than 16 million people, or 1 in 3 South Africans. His current term as ANC leader runs until 2017 and as president until 2019.
Hold on power
“Whilst on paper Zuma looks as though he controls all the levers of power, the reality on the ground is that his actions will weaken his administration and sow seeds of internal distrust and distress in the way South Africa is being governed,” Silke said.
Van Rooyen isn’t the first unknown to be appointed to a key cabinet post. In September, Zuma named Mosebenzi Zwane, a lawmaker whose previous political apex was in the government of the rural Free State province, as mines minister even though he had no experience in the industry.
Among his other appointees was Energy Minister Tina Joemat- Pettersson, who the nation’s graft ombudsman accused of wasting state funds and violating state tender rules. Bheki Cele was fired as the nation’s police commissioner after the ombudsman found he acted unlawfully when a board of inquiry found him unfit to hold office.
While Van Rooyen’s appointment probably won’t immediately loosen Zuma’s grip on power, it may cost the ANC support in next year’s local government elections and that may ultimately backfire on the president, according to Friedman.
“This is a bit more of a complicated issue than one bad guy,” Friedman said. “The president is part of it, but he is not the only part of it. If the result from this is very negative in the market place, which it so far has been, the obviously pressure builds up and people start saying: ‘Why did you get us into this mess?’”
BLOOMBERG