Analysis: Why Zuma is moving on Gordhan now

28 March 2017 - 12:06 By Ray Hartley
Finance Minister Pravin Gordhan, right, receives congratulations from Deputy President Cyril Ramaphosa, left, and President Jacob Zuma after he delivered his budget speech this week.
Finance Minister Pravin Gordhan, right, receives congratulations from Deputy President Cyril Ramaphosa, left, and President Jacob Zuma after he delivered his budget speech this week.

You will not understand President Jacob Zuma’s actions unless you accept the somewhat depressing reality that South Africa now inhabits.

Zuma may once have been master of his own destiny‚ but that point has long passed. He is now a wholly owned subsidiary of the vast Gupta network which has benefited from its association with him‚ his family‚ and the ministers and officials that he has put in place with their blessing.

That is why Zuma is acting to clip the wings of finance minister Pravin Gordhan.

Gordhan is at the centre of two matters which are rapidly coming to a head.

The first is his court action seeking an order that he ought not to interfere in matters between the banks and their clients.

  • Guptas go on the offensiveIn a new twist in its offensive against Finance Minister Pravin Gordhan, the Gupta family, through its company Sahara Computers, has launched a court application for a court order that he pay the costs of his court action involving the family. 

South Africa’s banks – and others such as the Bank of China‚ for that matter – have all given the Gupta companies their marching orders because of their discomfort with certain transactions.

This has led to a liquidity problem for the Guptas and that in turn has caused a liquidity problem for a range of others who rely on the crumbs that fall off the table‚ so to speak.

While the technical‚ legal argument over whether or not the finance minister ought to intervene is interesting‚ the case may be awkward for the Guptas because it will require them to explain a string of transactions listed by the Treasury as dodgy. Under oath. They don’t want that and nor do those at the receiving or giving end of these transactions.

  • Daggers drawn: Zuma’s efforts to subdue unyielding Gordhan climaxPresident Jacob Zuma's move against Finance Minister Pravin Gordhan yesterday caught both the ANC and the government by surprise - and a cabinet reshuffle now appears certain. 

Gordhan’s case was set down for Tuesday and Wednesday this week‚ unless‚ of course‚ he withdraws it. Since the case has been brought by him in his capacity as finance minister‚ there is a quick and easy solution: order him to withdraw it and if this does not occur‚ remove him from the finance ministry.

On cue‚ enter the Guptas stage left with a new affidavit in which they insist that Gordhan‚ and not his attorney‚ be present in court.

The second matter which is coming to a head is that of the payment of social grants.

The Constitutional Court has placed the Treasury at the centre of the process of getting the grants mess sorted out. This will‚ inevitably‚ mean the cessation of the contract between Cash Paymaster Services and the South African Social Security Agency (Sassa). And said business will not be permitted to increase its fees or extract greater profit unless it can persuade the Treasury to allow this. Under Gordhan this is not going to happen.

  • 'Give us clarity‚' pleads business following Zuma's Gordhan bombshellThe SA Chamber of Commerce and Industry (Sacci) has called on President Jacob Zuma to explain why he has called Finance Minister Pravin Gordhan back from an Invest SA roadshow and cancelled his deputy‚ Mcebisi Jonas' trip to the same event. 

The Treasury has given social development minister Bathabile Dlamini its views on how to proceed with grant payments. Dlamini‚ apparently not having read the judgment closely enough‚ is trying to manage the process through a “ministerial committee”‚ which would make Gordhan and the Treasury one among many at the table. Gordhan is having none of it.

Added to this fraught environment was a bad weekend for Zuma at the ANC’s national executive committee meeting‚ where his big play at turning the Eastern Cape into another arm of the “Premier League”‚ Andile Lungisa‚ was criticised.

Lungisa broke party rules by standing for office in a “lower” body than the regional executive on which he sits when he ran for leader of the Nelson Mandela Bay ANC.

Lungisa was subsequently made to step down.

  • Zuma wants Standard Bank's application in the Gupta case struck off the rollPresident Jacob Zuma has found himself caught in the legal dispute between Finance Minister Pravin Gordhan and the Gupta-controlled companies. 

And there was criticism of Zuma’s recent comments on land reform in which he supported the taking of land without compensation.

The pressure on Zuma is mounting and something is going to give.

He is going to bend Gordhan and his deputy‚ Mcebisi Jonas‚ to his will‚ or he is going to fire them‚ whatever the consequences. The Guptas have a man in place on the benches of Parliament to fill Gordhan’s seat at a moment’s notice – the recently sworn-in Brian Molefe‚ who was running Eskom when the Guptas concluded coal contracts.

So here we are‚ once more on the edge of a precipice. The rand has lost 3% of its value on Zuma’s recalling Gordhan from his investor road show. It will lose much more if Gordhan is fired.

Should Zuma go ahead with this strategy‚ you can expect the ANC to finally disintegrate into all-out open war between the Zuma camp and those opposed‚ including Gordhan.

Brace for impact.

- TMG Digital/Rand Daily Mail