Talking head, the kept politician, Mangaung, Ramaphosa, Motlanthe and other matters

I was interviewed on eCNA by the excellent Gareth Edwards yesterday about some matters relating to Mangaung, policy and succession. Catch that here.

… and here is a part of my weekly news summary from Monday morning:

Nelson Mandela hospitalised

It only just made the Sunday papers, but: “President Jacob Zuma wishes to advise that former President Nelson Mandela has today, 8 December 2012, been admitted in hospital in Pretoria to undergo tests… As said before, former President Mandela will receive medical attention from time to time which is consistent with his age” – presidential spokesman, Mac Maharaj.

So what?

There is no direct financial market implication of Nelson Mandela’s health (he has long since stopped playing any role in relation to South African politics or policy). However, the financial markets do not list the price of every important thing. At the level of sentiment, it will be impossible to separate the growing unease about many aspects of South African politics (see below) from the failing health of the universally loved founding father of the country.

Secret audit reveals how millions flowed to President Zuma

The Mail & Guardian has placed on its website a secret September 2006 KPMG audit of fund flows into Jacob Zuma’s accounts – it is still there this morning. According to the Mail & Guardian: “The report exposes the president as a ‘kept politician’ – a financial freeloader who accepted money and favours on a routine and increasingly extravagant basis not only from his so-called financial adviser, Schabir Shaik, but also from other benefactors, including Nelson Mandela.” The report was prepared for Zuma’s now cancelled corruption trial, and has thus never been contested in court. Mac Maharaj, spokesman for Mr Zuma, said: “Much of the information that is being headlined seems to have been in the public arena already, from the Schabir Shaik trial. I’m finding it strange that it is coming up now, in this fashion.” Here for M&G report and here for the full 490 page report.

So what?

The report should not derail Zuma’s re-election at Mangaung because, as Maharaj so clearly points out, only a few details within the 400-page document are ‘new’. The ANC elected Zuma as its president at Polokwane in December 2007 at the height of public interest in the details of the recently withdrawn corruption charges against him. These details did not stop the ANC then and are unlikely to influence the Mangaung outcome now. The report does add to the gloom around the apparently out of control cronyism at the heart of the ruling party – leaving us with low levels of confidence that Zuma and his government might be able to address the serious challenges facing the country and the economy.

Economic policy is where Mangaung action is – and most of that will be about resources

You had to be watching carefully, but the top ANC leadership signalled over the weekend that economic policy will shift at Mangaung and, further, that too much attention on the leadership struggle will cause observers to miss what’s important. In the Sunday Times, Gwede Mantashe argued the toss in a story headed “Mangaung is all about the economy”; in the Sunday Independent, Jesse Duarte did the same under a headline “Mangaung will clear all confusion over ANC policy”; and in the Mail & Guardian, Jeff Radebe wrote “Mangaung turns on economics”.

In all of these stories (coordinated in line, length, content and ordering, but presenting themselves as independent pieces by these top ANC leaders), it is argued that the National Development Plan co-ordinated with the New Growth Path is central to what “needs to be done”, that state intervention is the key to job rich and equitable growth, that mineral policy is the central area of change that can be expected at Mangaung, that BEE needs review, that land reform needs radical intervention, and that the ANC must be rebuilt to guide these processes.

City Press looked more closely at the State Involvement in the Mining sector document and pointed out that private sector companies were lobbying hard against the ANC’s intention to add a resource rent tax and to control the price of mineral inputs into the domestic economy – but that they (private sector companies) are unlikely to stop or significantly curtail the ANC’s plans.

So what? As we have stated (perhaps repetitively), the ANC is likely to recommend a rise in taxes in mining (or rather a shift to a resource rent tax regime that will have the same impact) and it (the ANC) is likely to decide on taxes on “unbeneficiated” mineral exports to secure supplies for domestic manufacturing combined with price controls as a stimulus to domestic manufacturing. And this is just in relation to the mineral sector. There are plans for state intervention across several sectors and we believe these will have serious impacts on investment in South Africa – many negative, some positive, but generally different across sectors.

 

Cyril Ramaphosa versus Kgalema Motlanthe

All the newspapers reviewed here (and several online sources) discussed in detail the fact that the Zuma camp has essentially nominated Cyril Ramaphosa for deputy president – making him a dead certainty for president in 2017 (if it plays that way).

So what? The Mangaung presidency issue is settled and the only interesting bit (as far as the electoral process is concerned) is the election of the deputy president.

The Zuma camp is entirely in control of the president/deputy choice, so when we analyse what might happen we have to ask: what is the imperative of the Zuma camp?

Well, that’s an easy one: to ensure that the corruption charges do not return and that the candidate and his continued ownership of his (and his camp’s/family’s) acquired assets remains secure even after Zuma has left office.

So which deputy choice could better ensure this outcome?

Would a President Ramaphosa eventually, following the logic of the Constitution and the law, and impelled by some hope for his own legacy, end up allowing Zuma to be charged for the original corruption charges?

Would Motlanthe?

I think Ramaphosa might, although I would not feel entirely confident that the Zuma camp could not construct a deal that keeps him (Ramaphosa) beholden long enough to ensure the achievement of the imperative stated above.

And Motlanthe?

I don’t think Motlanthe would pursue the corruption charges. He is a man who hates having to take decisions that “divide the house”. Taking down Nkandla is going to require something even more invasive and destructive than taking down Polokwane. I cannot see Motlanthe as the author of such a story.

As things stand, the nominations indicate that Ramaphosa will be elected as Zuma’s deputy. However, a last-minute ‘unity’ compromise might easily allow the Zuma camp to appoint the probably more pliable Motlanthe as deputy.