State capture is the buzz term in South Africa these days, thanks to explosive allegations that have erupted around President Jacob Zuma and the Indian Gupta family, who seem to have the keys to the South African government.
Dirk Kotze, a political scientist, explains how Zuma understand the benefits of harnessing institutions.
State institutions – in particular the criminal justice system – are being abused in internal power struggles within the governing African National Congress (ANC) and the government.
Gordhan’s woes began in earnest in February when the Hawks demanded his response to 27 questions about the erstwhile investigative unit at South African Revenue Services (SARS).
What followed over the next few months was a game of cat and mouse between the prosecuting authority and Gordhan. On May 20 the head of the Hawks, Lieutenant-General Berning Ntlemeza, confirmed that Gordhan was not a suspect in their investigation. His statement came as market sentiment towards South Africa intensified, threatening a downgrade of the country’s sovereign rating.
The game ended, however, on August 25 when the Hawks summoned Gordhan to their offices to sign a warning statement. He refused.
On October 11 he was summoned to appear in court. The summons was the fourth time this year that Gordhan had been confronted by either the Hawks or the National Prosecuting Authority.
Is there a pattern in these events?
I believe there is. And it has to do with the country’s National Treasury exercising its mandated independence. Efforts to thwart it began with the firing of then Finance Minister Nhlanhla Nene in December 2015. Subsequently, a crisis developed each time the Treasury intervened in the management of state-owned enterprises such as South African Airways, the electricity utility Eskom or the South African Broadcasting Corporation.
The question of Treasury doing its job – part of which is to ensure that taxpayers’ money is spent well and honestly – has also been inextricably tied up with the Gupta family’s patronage relations with Zuma. The country seems to have found itself in crisis mode whenever this relationship has come under the spotlight.
The most startling incident included a statement by Deputy Finance Minister Mcebisi Jonas that he had been approached by members of the Gupta family and offered the job of finance minister. This was while Nene was still in the post.
The Guptas’ contracts with Eskom about coal supplies and ownership of a mine also deepened the view that the Treasury was the only state institution which could arrest these developments, counter the patronage plague and reign in the Gupta business spree in state enterprises.
Gordhan appeared as the personification of the move to counter Zuma’s and Guptas’ designs on Treasury and a bulwark against fiscal indiscipline, mismanagement of the state businesses. South Africa found itself in an unusual situation: a government minister had become the main counterbalance for the president.
Zuma’s apparent survival strategy in most instances is to look for a skeletons in the closet. In Gordhan’s case, he thought he’d found one in the allegations that SARS engaged in illegal intelligence activities, on Gordhan’s watch.
The strategy appears to work this way: whenever Treasury opposes a plan by Zuma, his allies in state companies and the Guptas the Hawks respond by making it known that they have resumed their SARS investigation. Then, once the issue has been resolved, as when Treasury relented and agreed to provide a loan guarantee for South African Airways, the Hawks investigation goes quiet.