State of Capture: Corruption in Jacob Zuma’s South Africa

This is from Quartz Africa: 

The 355-page report detailing corruption in South Africa’s ruling party offers one rare uplifting moment. In the report, deputy finance minister Mcebisi Jonas reveals more details of how he turned down an offer by the powerful Gupta family of 600 million rand (about $44 million) to be the country’s finance minister.

Jonas, in an interview with Thuli Mandonsela, the country’s former anti-corruption chief who spearheaded the report released today, said he had agreed to meet with president Jacob Zuma’s son Duduzane Zuma on Oct. 23 last year, a few months before then finance minister Nhlanhla Nene was dismissed, kicking off a hailstorm of corruption allegations against the president.

Jonas met the younger Zuma at the Hyatt Regency hotel in the Johannesburg suburb of Rosebank where Zuma asked if they could move to a more private location for discussions “with a third party.”

Jonas was then taken to the Gupta compound in the suburb of Saxonwold where they were joined by Ajay Gupta, the eldest of the Gupta brothers, who briskly informed the deputy minister that “they had been gathering intelligence on him and those close to him.” Gupta informed Jonas that they were going to make him minister of finance, to which Jonas said that only the president could make that decision.

You can download the full State of Capture report here (pdf).

For more on the history of corruption in South Africa see here.

On Zumaphobia and the policy failures of the ANC

A lot has been written about Jacob Zuma’s failures as president of South Africa, most recently his odd decision to fire his widely respected finance minister, Nhanhla Nene. Zuma replaced Nene with an unknown ANC MP, David van Rooyen, only to replace van Rooyen with former finance minister Pravin Gordhan after intense pressure from the media and the markets.

Sources indicate that Mr. Nene was fired for holding the line on fiscal discipline.

Much of the analysis so far has focused on President Jacob Zuma — his increasing personalization of power within the ANC, corruption, and even his private life.

But in an interesting piece Andile Mngxitama questions this Zuma-centric narrative, instead focusing attention on wider policy failures within the ANC. Mngxitama argues (correctly, I believe) that:

Both Mbeki and Zuma are ANC cadres through and through and it’s the party policy that determines what they do. Zuma has not strayed from the ANC policies and no one has yet made this claim in any meaningful way. So, if it’s not policy that is the problem, how do we judge Zuma’s performance?

The main problem is that his detractors fundamentally agree with the ANC policies and they have therefore chosen to find fault with Zuma the man and thereby rob us of a useful analysis of why things are falling apart. A shift from Zuma to policy would also show that his presidency is a product of policy; the template for things to fall apart was designed by his predecessors.

Zuma’s sin, which has been missed by the analysts, who are too driven by “Zumaphobia”, is that he has not been able or willing to halt the downward spiral, which is essentially a byproduct of ANC policies. The main policy plank of the ANC since it took over in 1994 has been correctly described as neoliberalism – the privileging of capitalism as the driver of society.

The implications of this policy direction are to increasingly remove the state from society and the economy and allow the profit motive to determine who gets what service. The state privatises assets and those it keeps are similarly managed as if they are capitalist entities.

The piece at times sounds anti-market. But don’t let that distract you from its succinct understanding of the political economy challenges facing South Africa.

In 2008 the ANC recalled then President Thabo Mbeki. There is no reason to believe that President Jacob Zuma has totally eclipsed the party machinery. Indeed this has been made clear by his quick retreat after the brazen attempt to weaken the finance ministry.

Recent events in South Africa suggest that the party of Mandela is no longer(if it ever was) the voice of the people. But this outcome cannot be pinned on Zuma. The party elite, including Zuma, largely remain hostage to the post-apartheid political settlement. Meanwhile, the country’s deplorable economic indicators are adding fuel to the fire that is the Economic Freedom Fighters (which is increasingly sounding more and more mainstream and in tune with the frustrations not just of South Africans, but younger Africans in general north of the Limpopo). On a recent tour of London the EFF leader, Julius Malema, held meetings with CEOs of companies with interests in South Africa — a signal that these companies appreciate the potency of his message of economic freedom.

Mbembe on the State of South African Politics

Rainbowism and its most important articles of faith – truth, reconciliation and forgiveness – is fading. Reduced to a totemic commodity figure mostly destined to assuage whites’ fears, Nelson Mandela himself is on trial. Some of the key pillars of the 1994 dispensation  – a constitutional democracy, a market society, non-racialism – are also under scrutiny. They are now perceived as disabling devices with no animating potency, at least in the eyes of those who are determined to no longer wait. We are past the time of promises. Now is the time to settle accounts.

But how do we make sure that one noise machine is not simply replacing another?

That is Wits professor Achille Mbembe writing on the state of politics in South Africa. The whole piece is definitely worth reading (also liked this response from T. O. Molefe).

Economic elites in South Africa (both black and white) are playing with fire. The lessons of Zimbabwe were not learned. The implementation of Mugabe’s land reform project was a disaster, but there is no question that the levels of land inequality in Zimbabwe were simply politically untenable. Something had to give.

One need not be against everything neoliberal (whatever that means) to acknowledge that the same situation holds in South Africa, and that something will have to give. Consider Bernadette Atuahene’s observations on the land situation in South Africa:

When Nelson Mandela took power in South Africa in 1994, 87 percent of the country’s land was owned by whites, even though they represented less than ten percent of the population. Advised by the World Bank, the ruling African National Congress (ANC) aimed to redistribute 30 percent of the land from whites to blacks in the first five years of the new democracy. By 2010 — 16 years later — only eight percent had been reallocated.

In failing to redistribute this land, the ANC has undermined a crucial aspect of the negotiated settlement to end apartheid, otherwise known as the liberation bargain. According to Section 25 of the new South African constitution, promulgated in 1994, existing property owners (who were primarily white) would receive valid legal title to property acquired under prior regimes, despite the potentially dubious circumstances of its acquisition. In exchange, blacks (in South Africa, considered to include people of mixed racial descent and Indians) were promised land reform.

Rapid economic growth and mass job creation could have masked the structural inequalities that exist in South Africa. Instead the country got Jacob Zuma and a super wealthy deputy president (and BEE beneficiary), both of whom are singularly out of touch with the vast majority of South Africans.

There is no doubt that South Africa needs a complete reorganization of its political economy. The question is whether the process will be managed by a “moderate” outfit like the ANC; or whether leaders will continue to sit on their hands and allow voices of less moderate groups like the Economic Freedom Fighters to gain traction.

ps: Just in case it is not obvious, South Africans are unambiguously better off now — as a people — than they were under apartheid rule.