Zuma's Fate Rests With ANC After Finance Ministry Scandal

Updated on
  • ANC officials say they were offered posts by Zuma's friends
  • Upheaval comes months before South African municipal elections

The fate of South African President Jacob Zuma hangs in the balance as leaders of the ruling African National Congress began meeting Friday to decide if it’s time to replace him following a widening political scandal engulfing his administration.

The key issue at the three-day meeting of the National Executive Committee in Pretoria, the capital, is the role of the Guptas, a wealthy Indian family who’re friends with Zuma and are in business with his son. Two ANC officials have said the Guptas offered them ministerial posts in exchange for business concessions. While both Zuma and the Guptas have denied wrongdoing, the ANC said it’s taking the allegations very seriously.

Zuma at South African General Assembly on March 17

Photographer: David Harrison/AFP via Getty Images

“There is a type of a rebellion within the ANC,” Dirk Kotze, a politics professor at the University of South Africa in Pretoria, said by phone. “The NEC meeting will be a very important indicator of the climate within the ANC and whether there is potential for action against him.”

The controversy comes just months before scheduled municipal elections that could see the ANC, which has won more than 60 percent of the vote since white minority rule ended in 1994, lose control of cities including Johannesburg and Pretoria. Since taking office, Zuma’s tenure has been marred by corruption scandals, controversial appointments and policy missteps that critics say have stifled growth and investment and fueled public disenchantment. He won a second and final five-year term as president in 2014.

‘Untenable Position’

More than 70 percent of the NEC’s members elected at the ANC’s last national congress in 2012 were part of a bloc that backed Zuma, according to Theo Venter, a political analyst at North-West University in Potchefstroom, near Johannesburg.

“The NEC is unlikely to risk dismissing Zuma at this point, but it is clear his position is becoming increasingly untenable,” Ruth Bookbinder, an Africa analyst at Bath, England-based risk consulting firm Verisk Maplecroft, said by e-mail. “The president is unlikely to see out the end of his term.”

The current controversy exploded in December when Zuma’s decision to replace the respected finance minister, Nhlanhla Nene, with a little-known lawmaker sparked a selloff of the rand and the nation’s bonds. Four days later, Zuma reappointed Pravin Gordhan to the post which he had held from 2009 to 2014, after coming under pressure from ANC and business leaders.

‘Mafia State’

Deputy Finance Minister Mcebisi Jonas said Wednesday that the Guptas personally offered him Nene’s post. Jonas said he rejected the offer because it “makes a mockery of our hard-earned democracy.” A day before, Vytjie Mentor, the chairwoman of parliament’s portfolio committee on public enterprises until 2010, said the Guptas proposed that she take the job of public enterprises minister, while Zuma was in their house.

“We need to deal with this; it will degenerate into a mafia state if this goes on,” ANC Secretary-General Gwede Mantashe said Thursday by phone. “The fact we are talking about this so boldly now shows that things are going to change.”

The Democratic Alliance, the largest opposition party, said it had requested the nation’s graft ombudsman to investigate Zuma’s abuse of power.

Zuma said Thursday that he had no knowledge of the Guptas offering officials cabinet posts.

Zuma’s Authority

“The constitution does not require me to consult anyone before I appoint or remove a minister or deputy minister,” he told lawmakers in Cape Town. “I am in charge of the government. You don’t need the Guptas to appoint anyone. There are no ministers here who were appointed by the Guptas.”

Former ANC Treasurer Mathews Phosa, former Public Enterprises Minister Barbara Hogan and Ben Turok, a former head of the party’s ethics committee, are among those who have called for Zuma’s removal.

The ANC will issue a statement on the outcome of its meeting on Sunday, Mantashe told reporters in Pretoria.

Gupta Response

The Guptas responded to the controversy on Friday in a two-page advertisement published in the New Age newspaper, which they control. The family said while it had a strong friendship with Zuma that began before he became president, it hadn’t received preferential treatment from the government.

While companies controlled by the family have invested more than 10 billion rand ($650 million) in South Africa, the Guptas hadn’t secured any of the more than 100 mining licenses they had applied for, and their attempts to buy companies including lender Nedbank Ltd. and steelmaker ArcelorMittal South Africa Ltd. had been rebuffed, according to the advertisement.

Nedbank Chief Executive Officer Mike Brown said by e-mail Friday that he had “absolutely no knowledge of the Guptas ever trying to buy a stake in Nedbank.”

While the ANC may leave Zuma in power for the time being, a particularly bad showing in the local government elections could seal his fate, according to Peter Attard Montalto, an economist at Nomura Plc in London.

“While possible, it seems less likely now,” Montalto said by e-mail. “We expect a broadly stalemate whitewash outcome from this NEC.”

(Updates with meeting starting in first paragraph.)
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