Probe on South African finance minister splits ANC

Leading officials of the African National Congress (ANC) party, have called on finance minister Pravin Gordhan to hand himself in for questioning over allegations of corruption.

South African Finance Minister Pravin Gordhan reacts during a media briefing in Sandton near Johannesburg March 14, 2016. REUTERS/Siphiwe Sibeko/File Photo

The investigation has drawn battle lines between Pravin Gordhan on the one hand, and President Jacob Zuma and his allies on the other.

The case dates back to the time the finance minister headed the country's tax service between 1999 and 2009.

It's believed he set up an illicit unit to spy on politicians, including President Jacob Zuma.

Last Thursday, he was summoned by police investigators known as the Hawks for questioning, but refused to go, saying he's the victim of a witch-hunt.

Widely respected in the finance sector for his attempts to clean up corruption, Gordhan is credited with targeting state-enterprises owned by the powerful Gupta family, who president Zuma is close to.

"You have on the one hand a man who wants to buy loyalty with state resources," Nick Branson, a senior researcher at the Africa Research Institute in London told RFI by phone, "and on the other, someone who's determined to do his job to ensure that the public finances are in a proper state."

Those of the country's power provider Eskom have come under scrutiny.

Gordhan's ordeal

Gordhan put out a statement last week saying that Eskom had not been complying with the Treasury, notably on coal contracts linked to the Gupta-owned Tegeta Resources.

But other state-owned companies have also been criticized for failing to cooperate with the Treasury, such as Denel, an aerospace and security company, Transnet, a rail and ports authority, and VR Laser Asia, another Gupta company.

"It essentially shows that there are people within these state-owned enterprises who are trying to profit from their political connections," says Branson.

Gordhan believes he is paying the price for the zealous work of the National Treasury into the influential Gupta family, who have since announced they will be selling all their interests in South Africa by the end of the year.

Proxy war

Branson for his part, reckons the case against the finance minister could split the ANC down the middle.

"It's really a proxy war that's being waged within the ANC, between factions that are effectively committed to patronage based government, to a president who's intent on buying loyalty because he's failed to earn it from voters and then another faction which is more committed to fiscal rectitude to the rule of law," he says.

There are those in favour of Gordhan, such as Deputy President Cyril Ramaphosa, to whom he pledged his “total confidence,” and those against, like Deputy Secretary General Jessie Duarte, who has urged Gordon to go in for questioning if he has nothing to hide.

On the streets of Johannesburg, South Africans are far from impressed by all this internal wrangling: "Whenever something goes wrong in the ANC it affects us the ordinary people," Samuel Mabuela, an engineer, told RFI.

"State machinery is being used by the ANC to fight ANC members [...] as a result we're being affected. There are a lot of people who are unemployed. The rand is failing, the rand is really losing its value, since inflation levels are rising, so everybody is concerned."

Jitters

So too are the markets.

The rand plummeted last week on news that the finance minister was being investigated.

A falling economy couldn't come at a worse time for the ANC, which is still reeling from the shock of its dismal performance in local elections this month.

Whilst at the same time, it's preparing for a succession battle next year when Jacob Zuma steps down.

Many opposition parties say Zuma may try and use the investigation of Gordhan to install a more compliant finance minister.

Their relations were forged more out of a marriage of convenience than real love.

Zuma was pressured into appointing Gordhan back in December to stop the rand from hemarroging, after he sacked the then finance minister Nhalanla Nene.

Social cost

"Before Zuma fired Nhalanla Nene, things were very cheap," recalls Samuel.

"Now you buy a packet of tomatoes for 80 rands when before it was only 10; a packet of potatoes is now 45 rands, where before it was 10," he says angrily.

"It's not just about Zuma, they rule the whole of South Africa, so everybody in the ANC, those factional bases they are all over the country. In my local municipality last year there was a strike for four months because of infighting within the ANC between those who support Zuma and those who don't support Zuma. It affects everybody," he said.