President Jacob Zuma needs to get rid of finance minister Pravin Gordhan as a matter of urgency, if the system of patronage and tenderpreneurship that has underpinned his presidency is to survive to 2019 and beyond.
This is the view of Nomura research analyst, Peter Attard Montalto, reflecting on the so-called “Sars Wars” which have sent South Africa’s markets on a downward path over the past few days.
Pres. Zuma’s war with the Finance Minister is all about winning the ANC elective conference – currently scheduled for December 2017, though possibly earlier, which now adds a sense of urgency.
“Winning the elective conference is about then charting a path under a new leader, but that represents the status quo for (Zuma’s) tenderpreneur faction, through to the ANC winning in 2019.”
“The route to that is a well-oiled patronage machine, which requires, ultimately, control
over National Treasury (NT),” Montalto said.
The major reason why Pres. Zuma is so desperate to get rid Minister Pravin Gordhan are :
- SAA issue.
Guarantees were needed. The deadlines were a little fuzzy. Hong Kong needed accounts (showing solvency) or else would ground any plans there. The South African Air Services Licensing Council required accounts and proof of solvency or else would ground SAA planes. Leasing companies could also seize assets if this were to happen. This is the most pressing issue. The saga went on and on with Gordhan challenging Pres. Zuma to the fullest.
- Eskom, PRASA, and NT investigation.
Pres. Zuma’s faction, wanted an end to Treasury investigations of PRASA, Eskom contracts, and similar issues ongoing or about to start. They also want NT to stop blocking a lack number of tenders and contracts that are seen as politically necessary.
- Nuclear deal.
The nuclear deal is also seen as being stalled on by Treasury, and Pres. Zuma’s faction wants movement here to hard tendering by year-end.
As such, it believed that a Pravin Gordhan exit is a ‘live’ issue – though putting a precise timeline on this or calling the end point is exceptionally difficult. We believe we are moving towards the endgame.
“We believe that Pravin Gordhan will fight for as long as possible to remain in position
and to protect the law, NT, and its staff.
He is protesting his innocence in the strongest possible terms but also putting the ball firmly in Pres. Zuma’s court to fire him.