Gordhan Expects Charges as South African Succession Battle Rages
Comment of the Day

August 31 2017

Commentary by Eoin Treacy

Gordhan Expects Charges as South African Succession Battle Rages

This article by Boris Groendahl for Bloomberg may be of interest to subscribers. Here is a section: 

The National Prosecuting Authority has been probing the unit in an investigation that Gordhan, opposion parties and civil-society groups say is politically motivated. The former finance minister described the latest moves as an attempt to discredit politicians who oppose Zuma and are fighting against the plunder of state resources in Africa’s most-industrialized economy.

Scandals have shadowed Zuma, 75, during his eight-year presidency, including a finding by the nation’s top court that he broke his oath of office by refusing to repay taxpayer funds spent on his private home.

‘State Capture’

The nation’s graft ombudsman accused him of allowing members of the Gupta family, who are in business with his son, to influence cabinet appointments and the award of state contracts, referred to as “state capture.” Zuma and the Guptas deny wrongdoing.

On Aug. 8 more than two dozen of the ruling African National Congress’s lawmakers backed an opposition motion of no confidence in Zuma in a secret ballot in parliament. While he survived, the party fired Makhosi Khoza as chairwoman of a portfolio committee and wrote to Derek Hanekom, the head of its disciplinary committee, rebuking him for his Twitter postings calling for the president’s removal.

Zuma is due to step down as the ANC’s leader in December, with his ex-wife, Nkosazana Dlamini-Zuma, and Deputy President Cyril Ramaphosa seen as the leading contenders to replace him.

“It’s a massive tussle -- it’s about the future of the ANC as we’ve known it,” Gordhan said. “Either you follow the capture of the ANC,” or change the party’s character and “recapture the state, which has now gotten into the wrong hands. People like ourselves are backing Mr. Ramaphosa, because we believe he has the integrity, to put it bluntly. And secondly, he has the modernity to innovate, to allow new ideas to emerge, understands the economy. ”

Eoin Treacy's view

In much the same way Winnie Mandela took a dominant position in the ANC, Zuma’ ex-wife is likely to be a formidable opponent not least because of the support she will receive from Jakob Zuma’s tenure.  However, despite the continued deterioration of standards of governance under Zuma the existence of opposition both within and outside the ANC is positive as is the freedom of south Africa’s judiciary.

The Dollar has held a progression of lower rally highs against the Rand since its peak in early 2016. It mostly recently encountered resistance near ZAR13.5 and a sustained move above that level would be required to question potential for additional Rand strength.

Helped both by the recovery in industrial resources and the strength of the currency, which is attracting inward investment, the Johannesburg All Share Index broke up out of a more than two-year range last month. A sustained move back below the trend mean would be required to question medium-term scope for additional upside.

Interestingly Exxaro Resources, a major coal producer, has been the best performing share on the Index year-to-date. That is followed closely by Naspers. 

Back to top

You need to be logged in to comment.

New members registration