Tag Archives: South Africa

South Africa – two die in shoot-out at KZN SACP meeting

iOL.za

2 dead as bullets fly at SACP meeting

 

2 dead as bullets fly at SACP meeting

ANC members from Hammanskraal, Ward 49, set alight a T-shirt with President Jacob Zuma’s face printed on it outside the party’s Tshwane regional office in a protest against alleged branch vote-rigging. The selection of candidates has resulted in violence erupting in KZN. Picture: Oupa Mokoena/Independent Media
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26 January 2016 at 09:22am

Durban – Fiercely contested nominations for the local government elections may have led to the deaths of two people in KwaZulu-Natal.

The two people were killed on Sunday night at a South African Community Party (SACP) meeting in Inchanga outside Durban.

Pensioner Philip Dlamini, 68, and an unknown man were fatally shot at a soccer field where the SACP had held a meeting.

It is believed that the unidentified man was killed by people who were attending the meeting after they suspected him of being a hit man.

Read: Inchanga shootings raise suspicions

Inchanga is the home village of eThekwini mayor and provincial SACP chairman, James Nxumalo, who was at home when he heard “about 50” gunshots from the nearby soccer field where his SACP supporters held the meeting.

KZN police spokesman Major Thulani Zwane said two murder cases had been opened and three men were taken in for questioning, although no one had been charged.

The ANC is already facing problems in some areas where contestations for positions of councillors have resulted in violence.

And on Monday, a T-shirt bearing the face of President Jacob Zuma was burnt in front of the ANC’s Tshwane regional headquarters in Arcadia as internal unrest that has hit the party continued.

Dressed in the party’s regalia, ANC members from Hammanskraal outside Pretoria chanted, danced and hurled obscenities at their leaders. Their protest followed yet another branch meeting which the members claimed took place behind their backs.

ANC secretary-general Gwede Mantashe sought to downplay the problems, saying it was to be expected with all local government elections.

“Selection of candidates is always a tense process, it is not something new that we are beginning to see. Actually it is not as intense as in the last elections, we are paying attention to those areas but the reality is that selection of candidates for council is always a life and death issue,” he said, speaking on the sidelines of the ANC national executive committee lekgotla at St George’s Hotel in Pretoria.

Read: ANC tight-lipped about Inchanga killings

In Inchanga, Durban, it is believed that the violence was a culmination of the disputed provincial and regional leadership. The ANC in KwaZulu-Natal broke into two camps after Sihle Zikalala was elected party provincial secretary at the provincial conference.

Late last year, councillor Zandile Gumede defeated Nxumalo in the race for eThekwini regional chairperson. Mchunu and Nxumalo supporters refused to support the new leadership.

Nxumalo’s ANC adversaries had held a separate meeting at a nearby local community hall, where they were nominating ANC candidates for the local government elections. He said he had planned to attend the SACP meeting, but he was delayed as he had visitors at home.

“As I was about to leave my home (for the meeting), I heard gunshots, about 50 of them coming from the soccer field. I phoned the local police station, and immediately I phoned provincial commissioner (Lieutenant-General) Mamunye Ngobeni asking her to deploy police,” he said.

People who were at the SACP meeting said they witnessed “an action movie”, except they were the targets. They said trouble started while community members were questioning four men who were not from the area about their presence at the meeting. The men had arrived in a silver-grey Mercedes-Benz, but remained in the car while the meeting was in progress.

“We went to demand that they explain their presence, but we soon spotted rifles on the back seat. We opened the doors to pull them out but three of them broke out and ran away, leaving the driver trying unsuccessfully to start the car to drive off,” said one resident.

The driver was later found dead a short distance from his car. As the crowd was chasing after the three men, Christopher Radebe said he saw about four vehicles speeding towards the soccer field with occupants shooting in the direction of the crowd at the field.

“We all ran away. Dlamini was running with me, but he fell,” said Radebe.

One man said he saw Dlamini falling after being hit by a bullet. “I saw a man jumping from one of the cars and went straight to finish Dlamini off,” said the man, adding that several vehicles were also damaged by bullets.

It is understood that the meeting had discussed the ANC’s decision to sideline Nxumalo’s supporters from the nomination at the hall.

“We then took a decision to nominate our own candidate to stand for elections. But the attack happened before we started nomination,” said an SACP supporter.

However, Nxumalo denied that the SACP meeting was meant to nominate election candidates.

“That was a SACP meeting to discuss various issues. The communist party cannot nominate and there was no way it could to that.”

Nxumalo said he had accepted his recent defeat by Zandile Gumede for the position of eThekwini regional chairman, which had split the party in the region.

He said the provincial leadership had suggested a joint public meeting between him and Gumede to bring peace in the region.

“If there are factions, I think it would be a good thing that we hold the meetings, and tell people to calm down and wait for ANC processes to deal with disputes.”

The Ward 4 councillor in Inchanga, Mzwamasoka Shozi, said the shooting had nothing to do with the ANC nomination meeting.

“We can only wait for the outcome of the investigation because we don’t know what led to the shooting, which happened after we had finished nominating our candidates,” he said.

The ANC in the eThekwini region condemned the attack.

“We cannot speculate, but we are calling upon our members and alliance partners to be vigilant,” said regional spokesman Bheki Ntuli.

On Thursday, another Inchanga resident, Bongani Dladla, was killed outside his home. He had been expected to be nominated to stand for the ANC in the area. – Additional reporting by Mogomotsi Magome

The Mercury and The Star

South Africa – why student #FeesMustFail will continue

Mail and Guardian

The university fees protests have picked up from where they left off last year. Here are three reasons why they are still going strong.

#FeesMustFall protests during 2015. (Delwyn Verasamy, M&G)

As some universities prepared for registration for the 2016 academic year, students started #FeesMustFall protests again. On Monday, the first day of registration at the University of the Witwatersand, registration was disrupted by #FeesMustFall students as they demanded that registration fees be cancelled. These protests are a continuation fromthe ones last year which were intermittently stopped for examinations to take place. Protests continued even after President Jacob Zuma announced that there would be no fee increments for 2016, however, many students were not pleased and vowed that they will continue in the new year. Here are three reasons why the #FeesMustFall protests will continue

Fees did not fall, they were frozen
President Zuma’s announcement at Union Buildings was received with mixed reactions, with most students saying that it was not a victory. “Fees have not fallen. They were merely frozen by a President who refused to address us in person. So no, I am not at all happy,” said a University of Pretoria student at the  Union Buildings in October last year. Even if the fees do not increase, some students will still be financially excluded and will not be able to return to the university. The Wits Student Representative Council (SRC) has been inundated with students who have been excluded from the university because of finances. The various #FeesMustFall movements are demanding that all registration fees be cancelled so that students register for free.

End of Outsourcing
Outsourced labour makes up the bulk of the workers at various universities and this issue has been central in the #FeesMustFall protests as outsourced workers stood in solidarity with students. In October last year, a week before #FeesMustFall began, student movements from various universities such as Rhodes, UCT and Wits held a solidarity march calling for the ending of outsourced labour in universities. The fight to end outsourcing is far from over, with university management agreeing to insourcing and task teams having been put into place to determine the most strategic way to implement outsourcing.

Decolonising academia
The issue of exorbitant tuition has indeed united South African students, however, before #FeesMustFall there was #RhodesMustFall, #OpenStellenbosch, #TransformWits and #ReformPuk – student-led movements that are dedicated to transforming academia into a more inclusive space. “We don’t want to treat the symptoms, we want to decolonise the university – that is at the heart of the cause,” said EFF Wits leader Vuyani Pambo on KayaFM.

As more universities open for registration, it is predicted that protests will continue.


South Africa – #FeesMustFall leads to suspension of Wits students registration

Mail and Guardian

Student registration at Wits University has been suspended for the day following the return of fees protests at the institution.

#FeesMustFall protests last year. (Delwyn Verasamy, MG)

Student registration at Wits University has been suspended for the day following protests at the institution.

Wits Student Representative Council President Nompendulo Mkatshwa spearheaded student protests at the university’s Hall 29, where on site registration was meant to take place.

She told parents and students that the SRC would not permit any students to register until their demands were met by university management.

“Our intent is not to render theses institutions ungovernable … our intent is to ensure that every academically qualified student registers in the year 2016. An injury to one is an injury to all.”

Mkatshwa said there was a concern among students around an extension of the 0% fee increase.

“Right now we have no certainty that we will have a 0% increment in the year 2017 … we don’t know when this tag team is going to start implementing structures towards free education,” she said.

Mkatshwa said they were giving university management 24 hours to respond to their demands.

An assisting dean, then addressed parents and said registrations was suspended for the day, and urged students to register online.

This protest follows last year’s country wide student demonstrations against fee increments for 2016.

President Jacob Zuma then said there would be no increase in fees for the year. – News24

South Africa – Ramaphosa absence from ANC anniversary dinner causes a stir

Mail and Guardian

Rumours of tension between Cyril Ramaphosa and Jacob Zuma have taken centre stage ahead of the president’s January 8th statement address.

Cyril Ramaphosa's absence from Friday's gala dinner has sent the rumour mill into overdrive. (Delwyn Verasamy, MG)

The absence of Deputy President Cyril Ramaphosa at the ANC’s gala dinner in Sun City on Friday appears to have caught party leaders – including President Jacob Zuma – off guard.

Ramaphosa was away in South Sudan as part of his effort to help that country end its civil war and reunite the divided ruling party, the Sudan People’s Liberation Movement, but he was expected to attend the gala dinner – usually used to raise funds for the party.  Ramaphosa’s no show at the event could be interpreted by some as an indication of an increasing tension between him and president Zuma.

Zuma, who appeared to be in the dark about his deputy’s whereabout, was forced to do damage control after ANC Women’s League treasurer and International Relations Minister Maite Nkoana-Mashabane told guests attending the gala dinner on Friday that the deputy president was expected to be at the event.

“Things can happen. Meetings can be longer than you thought. I think he [Ramaphosa] is on his way back. He actually said [to me] I will be back on Friday. I almost said to him, you might experience some difficulties. I used to have meetings [in Burundi] for 24 hours without stop. I am sure the deputy president is delayed somewhere,” said Zuma.

There have been rumours that Ramaphosa threatened to resign after Zuma’s decision to remove Nhlanhla Nene as finance minister and replace him with relatively unknown ANC MP David Van Rooyen. But Ramaphosa has since rejected these claims. Zuma was forced to remove Van Rooyen and replaced him with Pravin Gordhan after he was put under pressure by business.

It was not clear whether or not Ramaphosa would make it to the party’s main birthday celebration at the Royal Bafokeng stadium in Rustenburg on Saturday.

Nkoana-Mashabane’s spokesperson Clayson Monyela told the Mail & Guardian that the deputy president returned from Sudan after 1.30am on Saturday.

Zuma’s address on Saturday was likely to focus on education, corruption and the economic transformation. In his speech on Friday, Zuma said achieving tangible progress in transforming the economy would be one of the ANC’s key priorities in 2016.

“At the centre of our work this year must be achievement of tangible progress in fundamentally transforming our economy to meet the needs of all our people. We must do so in the face of difficult economic conditions. Developments in the global economy – such as a slowdown in major emerging economies and a significant decline in the commodity prices – mean that our own growth will be constrained,” said Zuma.

“These conditions, while they may reduce the fiscal space we have, should not diminish our determination to pursue the measures – some of which are contained in our nine-point plan – to stimulate growth, encourage job creation and drive transformation.”

In what appears to be a move to prevent more #FeesMustFall protests in 2016, Zuma said the government would soon announce a commission to look at promoting access to higher education. Zuma said the party would continue its fight against corruption and that it would not tolerate leaders who brought the party into disrepute.

“We expect our cadres to earn the respect of their peers and society at large through their exemplary conduct. They must be informed by values of honesty, hard work, humility, service to the people and respect for the laws of the land.

“We must work together to defeat patronage, the arrogance of power, bureaucratic indifference and corruption. We must serve the people selflessly and tirelessly,” said Zuma.


South Africa – EFF’s Shivambu says SA is under the Guptas

Daily Maverick

  
We should never agree to be puppet-mastered as if there are no rules and principles that govern this country. We call on all South Africans to stand up against the Gupta syndicate because we will soon be left with no country.

Many people in South Africa, including the country’s senior leaders in the ruling party, in government and the private sector are still wondering why Nhlahla Nene was abruptly removed as Minister of Finance without any sound explanation by Mr Jacob Zuma, who has foregone the right to be called President.
Yet, the evidence for Nene’s dismissal is there for anyone to see: Nene was removed to open space for the Gupta-led syndicate to loot State resources for private enrichment. The reality is that for some time now, South Africa has been under the management of a criminal syndicate masquerading as genuine business people, headquartered in Saxonwold. The Guptas are not a figment of our imagination. They have de facto colonised South Africa, with Zuma being the chief colonial administrator.
The Guptas have established a solid network inside the ANC, and have disproportionate and decisive influence in what happens in the ruling party and the State. The Guptas have lots of cash, and run South Africa’s state machinery in a manner that benefit them, and the soldiers they have in the national and provincial levels of government. In their network of influence, they have premiers of the Free State and North West provinces, ministers, chairpersons and Chief Executive Offices of state-owned companies. They also have control over many critical decisions that will financially benefit them and the puppets they control.
The first and last time anyone spoke about the disproportionate influence of the Guptas in the ANC was during the 2011 launch of the ANC local government election manifesto. At the time, the ANC Youth League president, Julius Malema said, right in front of Mr Zuma that South Africa’s democracy was “not a democracy of families; this is a democracy of the people of the country. When families are exploiting the resources of this country and are enriching themselves in the name of freedom, when those in political office abuse their power to benefit friends, the youth must rise in defence of the ANC”.
That call is as relevant today, and the call is to all South Africans to rise in defence of South Africa.
From there on, the attitude of Mr Zuma, the colonial administrator of the Gupta empire, took a dramatic turn, such that he never addressed even one meeting of the ANC Youth League national executive committee under the leadership of Malema. As Youth League Leader, Malema was privy to the reality that the Guptas would call individual members of the ANC National Executive Committee to tell them which ministerial position has been given to them, prior to the official announcement by Mr Zuma.
Fikile Mbalula was told by Atul Gupta that he was going to be Minister of Sports before Zuma announced the decision. We all know what happened to the leadership of the Youth League. This is not a point to decry because it led to the dialectical and necessary formation of the Economic Freedom Fighters, which fearlessly fights against all forms of corruption.
Since the dissolution of the Youth League and replacement with a desk which has no sense of what is happening in South Africa, the Gupta family was left to operate freely with no real internal opposition. They took over the ruling party’s real decisions, including bankrolling the re-election of Mr Zuma as president in the 2012 National Conference. In that way, the Gupta empire tightened the screws on their control of the ANC and the state.
In the Free State Province, the Guptas introduced programmes through Mosebenzi Zwane, which amount to millions of Rands, influenced Ace Magashule, partnered with his son on a business in a same way they did with Zuma’s son. They took charge of South African Airways, and even decided on basic things such as a subscription, so that their lousy newspaper, the New Age, is the most distributed and paid for newspaper in SAA platforms, including their check-in counters, lounges and flights. They opened offshore accounts for their beneficiaries, including that of a minister, the one who thoughtlessly displays the fact that he has additional income from no additional work.
In 2010, the Guptas managed to appropriate the mining licence of Kumba iron ore, effectively hijacking the mining rights of a company which was supposed to convert the licence from old order mining rights to new order mining rights. Imperial Crown Trading (ICT), an entity which is partly owned by Duduzane Zuma, the son of Mr Zuma, and the Guptas, tried to frustrate Kumba iron ore through a court case, which they lost at the Supreme Court of Appeals in 2013. (Of course the Guptas lost the court case because they have no respect of the law.)
The decision to replace Minister Ngoako Ramatlhodi was taken in Saxonwold, and as a matter of fact, the presidential convoy was in Saxonwold the day before Zwane was announced as a Minister of Mineral Resources. Zwane was appointed to allow the Gupta empire to have control over mineral rights and policy in a manner which will benefit the family. In his previous role as MEC in the Free State, Zwane had excellently served Gupta interests through a dairy project which the provincial government paid millions for, but never materialised, and is subject of investigation by the Public Protector.
The Gupta entrance into the media space through The New Age, ANN7, and SABC is also an attempt to colonise the minds of all South Africans. The New Age and ANN7 are bankrolled by government departments and entities, with the Free State government spending millions of rands on Gupta media platforms. The SABC has been pushed into an unexplained cooperation with The New Age for a television breakfast show, which in terms of basic media business laws cannot be co-hosted with owners of a rival television station. The compromised and semi-literate SABC Chief Operations Officer, Hlaudi Motsoeneng, even appears on the rival ANN7 Awards ceremonies alongside Mr Zuma because Saxonwold said they should be there.
In a recent blog writing, Alec Hogg tells a story of how Atul Gupta instructed Mr Zuma around. Hogg says:
“While in Davos, I met an Indian newspaper editor who proudly informed me he had interviewed my country’s president. After smiling at my surprise, he told about recently accompanying an Indian Business delegation to SA. At one of the cocktail functions he made small talk with Atul Gupta, head of Sahara Computers, proprietor of The New Age newspaper and, via his shell ICT, attempted hijacker of the Sishen iron ore mine’s mineral rights.
The way my new acquaintance told the story, he mentioned to Gupta how he would love to interview Zuma (wouldn’t we all?). No problem, said The New Age boss man, and a few minutes later the surprised editor heard the South African president being instructed to make time for this interview. The astonished Indian newspaperman duly got his face-time with Zuma. But wondered privately to me at the influence of Atul Gupta who was able to swing something so difficult with such ease”.
This is just one of the many illustrations of how influential and controlling the Guptas are on Mr Zuma and everything he does. The Guptas are the only ones who recurrently transport the President in private cars to their compound to instruct government ministers and SOCs officials to take decisions in their favour.
Now, the reason why Nene was removed and replaced with Des van Rooyen is because Saxonwold said so. Van Rooyen is not an elected leader of any organisation; he is a political extension of North West Premier, Supra Mahumapelo, who is as rapacious as Ace Magashule and Mr Zuma, and part of the Guptas’s sphere of influence. Geographically, the paltry political contributions of Van Rooyen happened in Gauteng where he was a mayor in Merafong, yet the person who introduced Van Rooyen to Zuma is Mahumapelo, Premier of the North West, because like Magashule with Mosebenzi Zwane, and David Mabuza with Intelligence Minister David Mahlobo, Mahumapelo also needed his political extension in a senior cabinet position.
But why did the Gupta empire use Mr Zuma to take over National Treasury? There are three fundamental reasons, and they are:
The Nuclear Deal

Mr Zuma has since announced that the SA government intends to construct a nuclear power station, which will cost the State more than R1 trillion to finalise. In September 2015, the Financial Mail reported that:
This week, Oakbay released its annual report, in which chairman Atul Gupta argued that nuclear energy is the way to go. A hike in nuclear demand would boost Oakbay, whose main asset is Shiva Uranium, 165km southwest of Johannesburg, which it bought in 2010 and revived. Gupta said even though uranium isn’t well understood in SA, countries like China, Russia and Brazil are powering ahead with nuclear plans.
Nuclear energy is the key to meeting the exponentially increasing [global] energy demand over the next 20 years with clean power,” he said.
Gupta said Oakbay was “in the ideal growth market and uranium is the place to be”.
The reality is that Nene argued, correctly, that South Africa cannot afford nuclear power stations as such will cause a massive fiscal crisis. For that, Nene was removed and replaced with a powerless Van Rooyen, whose role would be to ask how high whenever instructed to jump.
The R4 billion Jet

Mr Zuma wants to purchase a R4 billion jet, not because he wants to fly in an expensive and safe jet, but because the actual cost of the jet is far less, and the supplier of the jet was going to be companies associated with the Guptas. They are already leasing jets to the Presidency like the one used by Mr. Ramaphosa in the recent past visit to Japan. National Treasury under Nene correctly illustrated that such a purchase is not necessary, and will add to a fiscal crisis.
SAA
The Gupta family has shown plenty of interest in the South African Airways and their intentions go beyond the contracts they intend to have with the airways. The ultimate intention is to cause huge debt for the airways, and ultimately buy it and turn into a private Gupta airways. As part of National Treasury interventions in SAA, Nene and the ministry has set key targets for SAA to achieve as part of its recovery plans and a vast majority of those were not reached. As a matter of fact, Treasury had drafted a Cabinet memorandum in which change of leadership was recommended and this meant that Dudu Myeni would no longer continue to misguide SAA. This was going to disrupt the looting intentions and aspirations of the Guptas and their puppets.
These, and many other private criminal syndicate intentions, are the major sources of the financial crisis caused by Mr Zuma. Any person with a brain knows beyond any doubt it was Mr Zuma (then introduced as Number One) who gave a go ahead for the Gupta plane to land at the Waterkloof airbase. That is why the person who was blamed for the landing was later promoted by Zuma to an ambassadorial post in the Netherlands.
When Van Rooyen was made Minister, he immediately appointed ministerial advisors, whom he had introduced to the senior management of National Treasury. It is a fact that majority of senior managers in National Treasury indicated that they will leave if such goes ahead, and that is the main reason why the decision to re-appoint Pravin Gordhan came about, because Mr Zuma was made to understand that if National Treasury senior management resign in huge numbers, the financial crisis was going to deepen to unmanageable levels. The bank executives who met Zuma feel like they influenced him to change the decision, but the fact is that the patriotic staff members in National Treasury coiled Zuma’s intentions.
These are hard core and open facts, and we challenge the Presidency and anyone who is mentioned here to factually dispute what we have said. The reality, dear South Africa, is that our country has been hijacked by a criminal syndicate which works with Mr Zuma to maximise private financial interests. The ruling party is incapable of resolving this crisis because most of their senior leaders are compromised and cannot do or say anything.
We have to stand up and close down the Gupta colonialists, whose greed will bring about a massive crisis. South Africans must stand up against rapacious looting of state resources. It is impossible to explain actions of a leader who cuts his nose to spite his fate, expect to say it was foolishness. How do you explain someone who destroys his organisation, and trust among his senior colleagues on the altar of looting state money?
We should never agree, as this generation have, to be puppet-mastered as if there are no rules and principles that govern this country. We call on all South Africans to stand up against the Gupta syndicate because we will soon be left with no country. Now that their National Treasury capture has failed, they will resort to other means of looting. They still control the majority faction in the ANC, and they have already said who their person of the year is through some bogus awards ceremony. We should not be afraid, we should fight to decolonise South Africa from Guptas. DM
Floyd Shivambu is EFF Deputy President.

South Africa – thousands march against Zuma; is his power slipping

BBC

Thousands of protesters are marching in South Africa to demand President Jacob Zuma is sacked.

The latest protests are a reaction to him sacking two finance ministers last week, further damaging confidence in the economy.

This comes on top of claims of widespread corruption, recent student protests and a succession battle in the governing African National Congress.

The marchers are using the hasthag #ZumaMustFall on social media.

The #ZumaMustFall hashtag is a modification of #FeesMustFall which was used to organise protests against a rise in university fees.

Before that, #RhodesMustFall was used to demand a statue of British colonialist Cecil Rhodes was removed from the University of Cape Town’s campus.


At the scene: Karen Allen, BBC News, Johannesburg

“It feels like the start of something big,” a woman in her 50s called Lianda told me.

It’s the first protest she has been on since she saw friends and family killed during the 1976 Soweto uprising.

For her it was important to join the demonstrations with her teenage daughters “for the sake of their future”. So along with thousands of others she came to register her displeasure at the ANC leader, who some increasingly see as a political liability.

But unlike the groundswell of protest that led to the recall of President Thabo Mbeke in 2008, Jacob Zuma still appears to have support within the National Executive Committee of the ANC.

Earlier this week, the party’s top brass went on TV to deliver a message to a South African public still reeling from the events of the past week, that they still support their president.

Yet privately there is said to be considerable disquiet within the ANC.

This may not be an Arab Spring but watch this space. The discontent is growing louder.


The ANC has been in power since the end of apartheid in 1994 and won a landslide in general elections last year.

However, the economy is struggling, unemployment is around 25% and many accuse ANC officials of corruption.

Mr Zuma’s decision to appoint the little known Des van Rooyen as finance minister, before replacing him four days later, was widely condemned.

The appointment led the rand to tumble to record lows, although it rose after he was replaced by the respected Pravin Gordhan on Sunday night.

 

Mail and Guardian

Academic Jannie Rossouw says that the president’s abrupt change of tack is evidence that his control of power is not as complete as was thought.

South Africans took to the streets countrywide on 16 December, Reconciliation Day, to demand that President Jacob Zuma step down. (David Harrison, M&G)

The cost to South Africa of the mistake in appointing Des van Rooyen as finance minister is completely overshadowed by the benefit of the knowledge that President Jacob Zuma’s grip on power is slipping.

Zuma’s abrupt change of plans showed clearly that his control of power is not as complete as was thought. His wavering should instil South Africans with new hope: there is a future after the Zuma era.

Late on 9 December, Zuma announced van Rooyen’s appointment as finance minister. Four days later, again late in the evening, he announced van Rooyen’s recall and brought back Pravin Gordhan to the role.

The weekend-and-a-bit between the two appointments made all the difference.

The financial markets responded sharply to Zuma’s initial announcement. The reaction was to be expected and it is surprising that he did not foresee what would happen. Nhlanhla Nene, the man Zuma removed, had instilled trust as finance minister. Van Rooyen was not known to anybody.

Zuma exacerbated uncertainty by not given clear reasons for his decision. The general conclusion was that Nene was recalled owing to his resistance to plans for nuclear power generation and for the restructuring of a financing deal for aircraft for South African Airways. His opposition was seen as a commitment to fiscal austerity. His removal was perceived as an indication that the South African government was abandoning such austerity.

The rand’s exchange rate dropped sharply, bond yields increased and share prices of South African companies, particularly banks, dropped dramatically. The share prices of companies with offshore activities increased owing to the decline in the rand’s value.

Counting the cost
This turmoil did not come without a cost. Zuma’s bad decision imposed a heavy penalty on the South African economy. The full cost, not counting lost confidence by investors, is impossible to calculate. Even the direct financial cost of Zuma’s bad decision-making can hardly be calculated.

As far as direct costs are concerned, Johannesburg Stock Exchange chief executive Nicky Newton-King said that the exchange’s market capitalisation declined by R169 billion in the two days following the announcement. This meant that the value of savings, held either directly or indirectly through investment funds such as pensions, had dropped dramatically.

South Africans are therefore poorer than they were on December 9.

There will be a direct impact on the country’s struggling middle class. The challenge for South Africa is not only to grow its middle class to ensure more people achieve a middle-class lifestyle, but also to maintain it.

Abandoning fiscal austerity will inevitably increase the tax burden on an already over-burdened middle class. Personal income taxes were increased in February 2015 and more increases are inevitable if government spending is not contained. Poor people in South Africa will also be worse off, mainly as a result of accelerating inflation on the back of price increases.

Poor people have little means to protect themselves against rising prices.

In short: bad policy decisions affect everybody, whether rich, middle class or poor.

The exchange rate of the rand also dropped to record lows against major currencies, declining briefly to just below R16 to the US dollar. A lower exchange rate has benefits for exporters, but also pushes up the cost of imports, with a concomitant impact on inflation. South Africa’s biggest import is fuel, which hits all – including the poor – directly and indirectly.

As is evident from bond prices, the market clearly expected higher interest rates to contain inflation. The yield on South African government bonds increased sharply. The yield on the R186 South African government bond moved from below 8.8% per annum to above 10.5% per annum.

Given the inverse relationship between bond prices and bond yields, bond prices fell in tandem with the increase in yields.

This increase of 1.7 percentage points (170 basis points) has serious implications for the South African government’s borrowing costs. According to calculations done by myself and Mike Lamont at Stellenbosch University, total new borrowing and roll-overs (refinancing of maturing bonds) amount to some R230 billion per annum. A permanent increase of 1.7 percentage points implies an additional annual interest burden of some R3.9 billion.

Junk status expected
This sharp increase in yields also served as a clear warning that the market expects a downgrade of South African government debt to junk status. International risk-rating agencies attach default possibilities (credit risk ratings) to government bonds, bonds of other institutions such as municipalities or water boards, and private companies.

The big difference between investment grade and junk bonds is in the default risk. Junk status indicates a larger risk that capital might not be repaid. Such bonds therefore pay a higher rate of interest to compensate for this larger risk.

The current rating of South Africans bonds are marginally above junk bond status and the market clearly expected a downgrade of South African bonds to junk bond status under van Rooyen’s stewardship.

The fear of a downgrade was driven by an expectation that the South African government would discard austerity fiscal measures under his watch, specifically with large and unaffordable spending on a nuclear power program and new aircraft for South African Airways.

After the announcement of the appointment of Gordhan as finance minister, the yield on the R186 bond declined to around 9.5%. Clearly yields are not back at their level before Zuma’s shock announcement, but the market has already given a clear indication of its confidence in Gordhan.

Lessons learnt
In his mishandling of the initial announcement, Zuma has reconfirmed one very important point: holding office does not bring greatness. The office of the president cannot and does not confer respect on Zuma. He must earn it. At present he is failing dismally.

The massive cost to the economy of a president that is the laughing stock of many inside and outside South Africa is unquantifiable.

Although the cost of the two days running up to the weekend-and-a-bit can hardly be measured, the full benefits of these events can also hardly be measured.

Zuma’s announcement was followed by a shocked reaction from civil society. This became such an avalanche that he had no option but to announce a change of plans within four days.

The fact that he had to change course so abruptly and quickly suggests that Zuma’s grip on power has been weakened. The tumultuous events of the last week in South African politics may indeed have a silver lining. – The Conversation

South Africa – is the country losing Mandela’s legacy?

City Press

  
News

Is Nelson Mandela’s legacy under threat?
Three prominent South Africans speak about Madiba’s legacy on the second anniversary of his death.
FW de Klerk
1. Where is SA now?
South Africa is losing its way: we are undermining the values on which our Constitution is based; we are adopting ideologies that threaten our democratic institutions and we are embarking on dangerous policies that threaten race relations, undermine national unity and inhibit investment. Everywhere people from across the spectrum seem to be motivated by their own short term advantage rather than by the common good.
2. Is his legacy under threat?
For all the above mentioned reasons Nelson Mandela’s legacy is being put under threat. Populists openly attack his commitment to reconciliation and constitutional values. However, I believe that these attacks will in the longer run strengthen his legacy. 
3. Why is it important to hold on to his values?
Nelson Mandela symbolised integrity and unwavering support for our constitutional values. The future peace, progress and prosperity of South Africa depends directly on our ability as a people to honour these values.
Patricia de Lille
“During the five years of Tata Madiba’s presidency as well as President Thabo Mbeki’s terms we were moving forward. Now we are slipping backwards. It’s time to pull ourselves up by our bootstraps and soldier on towards what Mandela sacrificed for.
It’s important to hold onto his values because although his journey has ended, we have the responsibility to continue on the path he set us on.”
Denis Goldberg
I believe South Africa is on the road to build a democracy. People are making use of the democracy to state their rights and objectives. There is no doubt that life is better now for millions of South Africans than it was before.
The values of the Mandela generation was a collective effort to make something new for us, not just a privileged few across the colour and social spectrum to genuinely transform our country.