amassive political defeat for zuma

The firing of Nhlanhla Nene and his replacement with the inexperienced David van Rooyen at the behest of President Jacob Zuma was the type of political decision-making that was set to have consequences. 

With billions wiped off the value of key financial stocks on the JSE and a plummeting rand, South Africa was staring down a financial abyss and rapidly approaching a fiscal cliff.

Speculation that the president acted without broad-based consultation on this ill-timed and even more ill-conceived decision caused an uproar not only within the broader business community but also among black intellectuals who saw the move as a virtual “last straw” in their tolerance of Zuma.

However, the reversal of the appointment of Van Rooyen – after four tumultuous and deeply damaging days – and Zuma’s reappointment of former finance minister Pravin Gordhan reflect more on the state of the Presidency and a new era of vulnerability for Zuma and his benefactors.

Without a doubt, such messy, indecisive and short-sighted decision-making has damaged the president.

Since “capturing” the Treasury only a few days ago, Zuma risked a palace coup. He must have been cornered by a segment of his own senior leadership both in and out of the Cabinet to restore a semblance of positive governance and try to undo the damage.

The stunning reappointment of the respected Gordhan indicates the levels of consternation that surely prevailed within the ANC this weekend. 

For Zuma, it is a massive political defeat and he is now more vulnerable than ever. His iron grip has been dented – a flip-flopping political head of state now becomes a potential lame duck who may well preside over the ebbing away of his own political support base.

This was a moment in which South Africa’s powerful leader was confronted – and he flinched. It is a sign of weakness, a chink in the armour, that does not befit a sitting head of state.

As for the effects on the domestic markets, there will be substantial relief. The rand is likely to see some upside and Gordhan’s own relatively intact track record and political gravitas will fuel much-needed positive sentiment – at least in the short term.

At the very least, there will be relief that a known (and respected) entity like Gordhan will hold the purse strings rather than the vastly inadequate Van Rooyen.

Questions remain over the South African Airways (SAA) Airbus financing deal and South Africa’s nuclear programme. One would hope that someone of Gordhan's political and intellectual gravitas protected himself by imposing some conditions in accepting the position of finance minister once again.

Indeed, should there be a pull-back on these important issues, he will have shown he retains autonomy over the Treasury, supported by strong centrist elements now openly hostile to Zuma.

But ultimately, fundamental questions around the economy remain. Will excessive spending and patronage–induced capital outflows (like that of SAA) continue? Will the nuclear programme still see a massive capex commitment from an economy staring down junk-bond status? Above all else, can Gordhan rescue the National Development Programme from the trash bin and try to implement prudent, socially uplifting and market-friendly economic policies?

Whatever the short-term consequences, the real change these past few days has been political. And a political change is required in South Africa to kick-start real economic delivery.  

Zuma and the Cabinet will retreat for the Christmas break into relative peace and quiet. But make no mistake: the Nene debacle has substantial consequences. And perhaps, for Zuma, life will not quite be the same again. The centre might just have shifted in the ANC – and that shift is away from the president.