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.

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The political phenomenon that is South Africa’s Julius Malema

nkandlaYoung South Africans are presently debating the merits of their country’s post-apartheid settlement. Many feel that in a rush to secure a stable political and economy transition the ANC leadership did not bargain hard enough for structural changes in South Africa’s political economy (here’s Mbembe on the subject). No leader encapsulates this sense of post-apartheid disappointment better than Julius Malema, this week’s guest on Lunch With the FT. Here is an excerpt:

Within a year of setting up the Economic Freedom Fighters, Malema’s party had become a force in South African politics. “They used to say, it’s cold outside the ANC, but we have made it very warm,” he grins, vowing to topple the ruling party within a decade. “If Zuma can be a president of this country, anyone can,” he scoffs, referring to a leader enveloped in sexual and political scandal.

When I challenge his assertion that the end of apartheid has changed nothing, he shifts seamlessly into crowd-pleasing rhetoric. “We are voting, but we can’t eat that cross,” he starts out quietly, referring to the right to vote that black South Africans won in 1994. “That cross has not taken our kids to school. That cross has not given our people the better life that was promised,” he says, his voice rising. “That cross has not returned our land. That cross did not return the minerals. So, when you say to me we have ended apartheid, when there is a huge economic apartheid in this country, I don’t know what you mean.”

His own party, which draws inspiration from Marx and Frantz Fanon, a Caribbean-born revolutionary who advocated the violent overthrow of colonialism, promises to rectify the situation. It proposes seizing white-owned land, with minimum compensation, and nationalising mining companies and banks.

Malema deftly combines incendiary revolutionary rhetoric, street politics, and a mastery of the institutional game within the South African Parliament. For example, partially due to unrelenting pressure from the EFF and Malema in Parliament, President Jacob Zuma was recently forced to return state funds that were used to renovate his private home in Nkandla.

Not long ago Malema was a boorish rubble rouser with a dim political future after being expelled from the ANC. Political commentators argued that:

Malema without the ANC is nothing… The tradition and the history of the ANC, he needs that in order to be able to make his point. Without that he’s very much isolated

But his image is slowly being rehabilitated. The ANC’s failures and economic stagnation add fuel to the fire that is EFF’s message of economic nationalism. malemaAppearances at Chatham House, meetings with business leaders at home and abroad, and modest successes in Parliament further add to the emerging image of an insurgent party that knows the rules and can play by them (even if with a view of eventually changing the same rules).

Just today, Malema was in court in a bid to secure a ruling that President Zuma violated the constitution in his initial refusal to refund the Treasury over Nkandla, thereby opening a window for impeachment.

The most potent revolutionaries are those that have the added advantage of knowing how to play the institutional game. Watch this space.

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.

Zuma may be a one-term president

Back when he dislodged Thabo Mbeki South African President Jacob Zuma promised that he would only serve one term. But having tasted the power of the presidency, he now wants a second term. His bid, however, has not been well accepted within the ANC.

Although it is common knowledge that the much-married Zuma wants a second term he has remained equivocal on the issue, at one point saying “I never said I would serve one term and I have never said that I would want two terms”  (The New Age reported on Wednesday, June 8th).

The Africa Confidential reports:

Zuma’s main rivals, Tokyo Sexwale and Deputy President Kgalema Motlanthe, are trying to fix it so that Motlanthe would be a one-term president, Sexwale would be his deputy and Paul Mashatile, Gauteng’s provincial leader and Premier, would be ANC national chairman. They may offer a deputy presidency to Lindiwe Nonceba Sisulu, the Defence Minister and Zuma’s ally. Sisulu and Sexwale, however, do not get along.

An anti-Zuma tirade erupted from the General Secretary of the Congress of SA Trade Unions, Zwelinzima Vavi, who said there is leadership paralysis in the ANC and warned that the country is in danger of ‘imploding’. He criticised Zuma’s ‘doublespeak’ on economic issues.

More on this here.

Links I liked

I just discovered Chri’s Blog on Madagascar and other Africa-related issues.

For those with a flavor of finance and capital markets and the political economy of development be sure to read Frontier Markets.

Germany is on the hunt for the UN security council seat in Africa.

And lastly, Justice – Uganda style:

Vice president upsets the president during tenure, president fires vice after election. Former vice gets accused of corruption. President declares former vice innocent, but leaves the matter up to the “independent” Inspectorate of Government. Here’s a quote from the president:

“What I know is that there was a power struggle between Bukenya and some businessmen but I found no merit in the case. But since the Inspectorate of Government is an independent body, let them investigate thoroughly.”

Yeah right.

Malema on trial

The video is worth watching. The lawyer cross-examining Malema actually makes the buffoon leader of the ANC youth league seem sane.

The South African land issue is a Zimbabwe waiting to happen. The sooner everyone accepts the truth the better.

Malema’s buffoonery is founded on real grievances about the distribution of productive land in South Africa. The more responsible elements in the ANC and those that benefited from decades of Apartheid disenfranchisement should wake up and smell the rooibos.

ht Eric Mibuari

The Mail & Guardian is reporting that the trial of ANC Youth League leader Julius Malema for hate speech is entering its second week. Malema is charged with hate speech for singing the South African struggle song “Dubul’ibhunu,” which translates to “Shoot the Boer.” Malema maintains that he has the right to sing the song, chanting the controversial lyrics at the courthouse.

This case is interesting because struggle music is a major part of South African culture, particularly black South Africans. The Boers participated in the oppression of black South Africans, even though they maintain that they are ethnically and culturally different from Afrikaners.

more on this here.

corruption in South Africa

South African democracy still has a long way to go. My greatest fear is that ANC supremacy might get into the heads of the party bosses and have them collapse the distinction between party and state. There are already allegations of corruption within the top ranks of the ANC. Ironically, if corruption is to be tackled head on within the ANC, Jacob Zuma is the right man for the job, his own failings notwithstanding. He seems to have a direct connection with average ANC supporters and could use this to rein in party bosses, or at least make them steal less.

It is hard being a disciplined hegemonic party. Tanzania’s CCM is a lesson in what the ANC should avoid. Botswana’s BDP might be a better example of a relatively disciplined hegemonic party. The party has ruled Botswana since 1966 without falling into the temptations of grand corruption and power grabbing.

Edit: Recent events have shown cracks beginning to form within the BDP. The world is watching what Ian Khama, son of Seretse Khama is prepared to do to secure his presidency in the face of increasing opposition.

jacob zuma: why crash so soon?

Update: President Jacob Zuma agrees that he fathered a child out of wedlock with the 39 year-old daughter of one of his friends. Mr. Zuma is 67. In his statement the President said that he had done the “cultural imperative” of admitting to having fathered the child. A few suggestions for Mr. Zuma and those around him:

– having three wives is bad enough. Concentrate on the job. South Africans are looking up to you

– please fire your communications director. You are really bad with PR

– you are embarrassing the entire Continent. Not just yourself and your immediate family but the entire Continent. The whole 700 million of us.

The BBC reports that Jacob Zuma may have fathered a love child last year. The South African president just recently got married for the fifth time (he has three wives). He is estimated to have about 20 children. Recently when confronted about his rather colorful matrimonial situation Mr. Zuma shot back with the claim that anybody who was against polygamy was a cultural bigot.This is total horse manure. Mr. Zuma should know that culture is not static and that an attack on his wayward habits is not an attack on Zulu culture.

Until recently Mr. Zuma had exceeded expectations. His cabinet appointments (i thought) signaled his pragmatism. He stayed clear of the incendiary demagoguery that characterizes the ANC’s youth wing leader, Julius Malema. Even the media had warmed up a bit to the man who had to wiggle out of corruption and rape charges to become president. For a moment I thought that Mr. Zuma was going to be the nice blend of populism and realistic politicking that had so much eluded the intellectually aloof Thabo Mbeki. South African land reform, a fairer redistribution and creation of wealth (through a more transparent BEE and faster job creation), a reduced crime rate, etc etc seemed somewhat doable because the core of his base was the working class. But as is fast becoming apparent, it appears that the man has decided to let his personal life interfere with his job. I hope this latest incident will embarrass the ANC enough for the party to ask Mr. Zuma to go easy on the distractions and concentrate on his job.

Update: This is the last thing that SA and its ailing economy needs. The tabloid-like headings are soiling the SA presidency.