Top ANC Leaders Oppose Zuma’s Plan to Fire Gordhan

By Sam Mkokeli

 Pravin Gordhan in Pretoria, March 28. Photographer: Waldo Swiegers/Bloomberg

Pravin Gordhan in Pretoria, March 28.
Photographer: Waldo Swiegers/Bloomberg

Three of the top six officials of South Africa’s ruling party told President Jacob Zuma that they opposed his plan to fire Finance Minister Pravin Gordhan, a person with knowledge of the matter said.

Zuma told the African National Congress leaders in a meeting on Monday that he wanted to dismiss Gordhan because he was aiming to undermine the president in meetings with investors while on a roadshow in the U.K. and U.S., the person with knowledge of what happened at the gathering said. Earlier that day, Zuma had ordered Gordhan to cancel the roadshow and return home from London, causing the rand to plummet.

The officials included Deputy President Cyril Ramaphosa, Secretary-General Gwede Mantashe and Treasurer-General Zweli Mkhize, according to the person, who asked not to be identified because a public statement hasn’t been made. The six officials agreed to meet again on April 3 to discuss the issue, according to the person.

If he fires Gordhan, Zuma risks a market meltdown and a revolt by opponents in the ruling party. If he doesn’t, he may appear weak as he seeks to secure his choice as successor as party leader in December. Zuma told members of the group that Gordhan is divisive in the cabinet and thwarts efforts by other ministers to deliver services, according to the person.

“Zuma is still very hesitant whether he can remove the finance minister,” Dirk Kotze, a politics professor at the University of South Africa in the capital, Pretoria, said by phone. “Once he kicks out Pravin Gordhan, there can be sympathy resignations and he doesn’t know how to predict that. Will it be Ramaphosa plus six, seven, eight, nine other ministers?”

The rand reversed losses on Wednesday after the report on opposition to Gordhan’s dismissal. The currency gained as much as 0.8 percent against the dollar after being 1.3 percent weaker before the report.

Rand erases against Dollar

As president, Zuma has the right to fire and appoint ministers at any time and doesn’t need the approval of the party’s top six leaders, which include Chairwoman Baleka Mbete and Deputy Secretary-General Jessie Duarte. Bongani Ngqulunga, Zuma’s spokesman, didn’t answer calls to his mobile phone.

Zuma told the officials that he favored Brian Molefe, the former head of the state power company, as a replacement for Gordhan, according to the person. Molefe resigned from Eskom Holdings SOC Ltd. in November after being implicated in a graft ombudsman’s report for favoring members of the Gupta family, who are in business with Zuma’s son, in awarding contracts. Molefe denied wrongdoing and Zuma has challenged the findings of the Public Protector report.

Gordhan Feud

Zuma was pressured to appoint Gordhan in 2015 after a decision to name a little-known lawmaker to the position caused the rand and bonds to plunge. Since then, he’s feuded with his minister over a planned nuclear power expansion and the management of state companies and the national tax agency.

According to the person, Zuma showed the leaders an intelligence report, seen by Bloomberg, stating that the Ministry of Finance and the National Treasury stand together against the president, and that Gordhan and his deputy, Mcebisi Jonas, had set up secret meetings to start what is called Operation Check Mate to undermine Zuma. Ramaphosa, Mantashe and Mkhize dismissed the findings and said they reserved the right to publicly oppose any decision to fire Gordhan, the person said.

Zuma’s move to cut short the finance minister’s roadshow is a concern for the country, Mkhize said at an event in Johannesburg Wednesday. The ruling party has a responsibility to ensure the nation’s economy stability and growth, he said.

Treasury spokeswoman Yolisa Tyantsi didn’t immediately respond to a phone call and text message seeking comment.

The South African Communist Party, which is an ally of the ANC and has criticized Zuma, will brief reporters in Johannesburg on Thursday morning.

“Gordhan is well-respected by virtually everyone bar the president and his supporters,” said Ruth Bookbinder, an Africa analyst at Bath, England-based risk consulting firm Verisk Maplecroft. “The president is unable to sack Gordhan without risking his own position. The latest spat between the two men suggests that Zuma is trying to make Gordhan’s position untenable. Unable to fire the minister, Zuma hopes to push Gordhan into resigning.”

Source: www.bloomberg.com

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