South Africa has descended into its worst political quagmire since the removal of President Thabo Mbeki eight years ago. His successor, Jacob Zuma, is facing growing calls for his resignation after the Constitutional Court ruled that he had failed to uphold the constitution. Since 2011, Zuma, who turned 74 this month, has been embroiled in a messy uproar over the use of public funds for his sprawling private home in Nkandla, in northern KwaZulu-Natal.
The debacle culminated in a scathing ruling in late March by the highest court in the land, which censured Zuma, his administration and the National Assembly for their failure to implement the prescripts of a report on the Nkandla saga by the Office of the Public Protector. “State resources belong to the public, as does State power,” Chief Justice Mogoeng Mogoeng said in his judgment. “The repositories of these resources and power are to use them, on behalf and for the benefit of the public.”
While the judgment was welcomed as a reaffirmation of South Africa’s constitutional order, it also laid bare Zuma’s poor leadership. Even heroes of the anti-apartheid struggle like Ahmed Kathrada, who was jailed on Robben Island with Nelson Mandela, have added their voices to the growing calls for Zuma to go. Unsurprisingly, the opposition parties have seized on the opportunity to mobilize South Africans to demand stern action from the ruling African National Congress (ANC).
But the party has until now proven reluctant to oust Zuma, who is also its president. ANC Secretary General Gwede Mantashe said that Zuma’s removal would “tear the ANC apart” and play into the hands of the party’s opponents.“The opposition does not represent wider society or the country,” he told reporters following one of the many hastily convened meetings of the ANC’s top leadership.
But aside from the Nkandla debacle, Zuma’s woes have also been fueled by his cozy friendship with the Guptas, a family that emigrated from India more than 20 years ago and has built a multibillion-rand business empire in South Africa. Zuma’s critics say that the Guptas’ business dealings have been aided by the fact that his son is a business partner of the Gupta family. In February, the militant Economic Freedom Fighters demanded that the family leave South Africa because of allegations that they had interfered in the appointment of cabinet ministers.
In a shocking disclosure that month, Deputy Finance Minister Mcebisi Jonas stated that the Guptas had offered him the position of his boss, Nhlanhla Nene, who had been fired by Zuma on December 9, 2015, sparking a slide in the rand and concerns about South Africa’s fiscal outlook. The EFF’s demand now appears to have been heeded. According to recent reports, two of the family’s key business figures quietly left South Africa for Dubai a few weeks ago with “a mountain of luggage.” By that time, the Gupta family had lost KPMG as its auditors, and two local banks had severed ties with its businesses, as public anger over their dealings escalated. KPMG cited increased risk as its reason for walking away.
The ruling by the Constitutional Court added yet more trouble for Zuma. He had tried to replace Nene with an unknown ANC parliamentary backbencher, but reversed the decision four days later, opting instead to reappoint Pravin Gordhan as finance minister. That was after domestic markets had gone into a tailspin, wiping more than R200 billion off the market value of South African financial assets.
Since the December debacle, it has been increasingly clear that Zuma’s grip on power was becoming tenuous. He is now fighting for survival, while different factions within the ANC are said to be bickering over what course to take in the wake of the damning ruling by the Constitutional Court. There is now also a vocal #ZumaMustFall campaign on social media.
Analysts say that the ANC would be committing political suicide if it ignores the calls for Zuma to go, as the electorate might see this inaction as a sign that the party puts its own interests before those of the country. On the other hand, getting rid of Zuma would be seen as handing a victory over to the opposition in an election year, as municipal elections are scheduled to take place on August 3. But whatever the ANC decides to do with Zuma, the party will want to contain the fallout as much as possible, according to analysts.
On April 1, instead of tendering his resignation, Zuma gave a televised address to South Africans in which he merely apologized for the “confusion and frustration” caused by the Nkandla affair. In recent days, a group of leading civil society leaders, including ANC stalwarts, launched a nationwide campaign to demand Zuma’s removal. Former finance minister Trevor Manuel has also called on Zuma to step aside. A union representing the members of the South African National Defence Force made a surprising call for Zuma to go, saying that he was no longer fit to be the commander in chief. That prompted a stern rebuke from Defence Minister Nosiviwe Mapisa-Nqakula, who said that a coup would not be allowed in South Africa. She said that there needed to be a “political solution” to the Zuma issue.
Meanwhile, a motion introduced by the opposition Democratic Alliance to impeach Zuma was resoundingly defeated a few weeks ago, when ANC parliamentarians voted it down. But this prompted criticism that the party did not care about the mounting problems with Zuma’s leadership, including his breach of his constitutional obligations.
Analysts have noted that the ANC will possibly do all it can to avoid ousting another president so soon after the removal of Mbeki, who was accused by sections of the ANC of conspiring against Zuma, then his deputy, to prevent him from becoming president. So, until there is clarity on how Zuma or the ANC will justify his stay in office, there is likely to be heightened anxiety among investors, businesses and society at large. Some of this anxiety has already resulted in a slide in confidence. There are even marches planned to press the ANC to act against Zuma. There is also a real concern that politics might stand in the way of efforts to stave off a downgrade of South Africa’s sovereign credit rating to “junk status” in June. Any spillover from these political problems will affect financial markets, so the ANC will be trying to navigate the political thickets as it plans for a future with or without Zuma.
“A carefully managed ‘Zumxit’ announcement is on the way, in our view,” said Peter Attard Montalto, emerging markets economist at Nomura. “Our baseline is that this may be announced after the local elections, in September or October, but actual exit may be later.”
Montalto noted that Zuma was not entirely weakened. “He still has access to captured institutions [like the state security services], the levers of state, the presidential prerogatives and powers, as well as patronage networks, etc. We do not agree with the views expressed in some quarters that he is running out of patronage to dole out.”
Regarding the ratings outlook, he said, “The manner of exit is key: a long managed exit through to January 2018 would allow downgrades to proceed, whereas an immediate exit could pause downgrades until next year. All this, of course, could be swayed by more negative macro and fiscal outcomes.” All told, a beating in the upcoming local elections would hasten Zuma’s exit, as the ANC looks to open a new chapter in the run-up to its 2017 elective conference and the next general election. The elections will show the extent of the damage done by Zuma to the ANC. At least that much is certain.
Photo Credit: CGIS