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*Politics, shmolitics* ?
There was some messy politics happening this week with more spy allegations and a rumoured standoff at a meeting of the ANC’s top leadership body, the NEC, over the weekend. But a lot of that is, again, the fight-back of the state capture brigade who are trying to stunt President Cyril Ramaphosa’s new dawn. Commentators are saying enough is enough: Ramaphosa needs to stop being Mr Nice Guy and rein in the likes of Carl Niehaus and ANC secretary-general Ace Magashule, who seem to be running their own opposition faction within the ANC.
A lot of the more outrageous politics headlines were also something of a distraction from the fact that our courts did a brilliant job of reining in our errant public protector.
Our economy took a knock with Treasury being forced to give Eskom a much bigger bailout that it has planned for. This has led to Moody’s the one rating agency that still likes us (i.e., has us at investment grade) downgrading our outlook. This doesn’t mean our rating has downgraded… yet. Just that they don’t think the bailout bodes well for the economy.
Let’s dive into the details!
*What’s up with our Public Protector?!* ?
As predicted last week, the news this week was dominated by our increasingly errant public protector. We always knew Thuli Madonsela had left behind big shoes to fill but wow, Mkhwebane hasn’t even tried ?
There are many different strands happening around Mkhwebane, so here’s a list of the different cases:
- The Constitutional Court last week confirmed she is personally liable for her botched South African Reserve Bank/Absa report, which was about a deal that happened in the dying days of apartheid. It all seemed rather politically motivated, given that she bizarrely recommended the Reserve Bank’s mandate be changed as part of the report – a favourite cry of the state capture lot. The ConCourt, which is the highest court in the land, rejected her appeal against the 2018 high court ruling that she pays 15% of costs, estimated to be R900 000.
- As a result of adverse legal findings against her and complaints from civil society, the Legal Practice Council of South Africa is currently deciding whether Mkhwebane should be struck from the roll of advocates. They said they would reach a decision by Friday but we’re yet to hear the outcome.
- Public Enterprises Minister Pravin Gordhan is fingered in two separate reports by Mkhwebane put out in quick succession:
- One: the so-called rogue unit. Gordhan is currently in court to:
- To interdict her recommendations that Ramaphosa takes urgent action against him [Update: he’s won] and
- To then review the entire report and overturn it. This is all over a unit formed in the SA tax authority 12 years ago, already scrutinized by independent authorities.
- Two: a pension payout made nine years ago by Gordhan to Ivan Pillay. Gordhan is also taking this to the courts to set aside.
- Ramaphosa is applying for an urgent interdict against Mkhwebane’s demands that he discipline Gordhan in the pension matter, saying he must wait for the court process Gordhan has initiated to be concluded first. In both Gordhan’s cases, Mkhwebane is insisting her remedial action be followed even if the findings are being contested in a court – relying on a precedent that was set during Madonsela’s time that, in retrospect, gave the office the of the Public Protector WAY too much power.
- One: the so-called rogue unit. Gordhan is currently in court to:
- Ramaphosa is taking her scathing report that he breached Parliament’s code of ethics on review over a Bosasa donation. This one is quite a big deal so I’ve fleshed it out as an optional extra below.
- Another of her reports that were overturned in May this year was back in the spotlight this week: The Estina Dairy Farm matter where money destined for 100 emerging black farmers was stolen, partly to fund the Gupta’s lavish Sun City wedding. Her first report was a bit of a whitewash when it came to Gupta-linked faves like Magashule, who was then premier in the Free State, where it all happened. This week the country heard one of the few testimonies from an affected farmer – they were previously apparently threatened with their lives if they spoke out. Speaking at the Zondo Commission into state capture, Ephraim Dhlamini claimed Mkhwebane never spoke to the beneficiaries for her first report and that he did not trust her.
- Parliament’s justice committee is likely to consider a request by the DA that she is unfit to hold office, but this will probably only start around September.
- As if all that wasn’t enough… she’s now planning on investigating the appointment of the new Sars commissioner.
As the millennials would put it… issa lot.
The EFF have been staunch defenders of Mkhwebane and persecutors of Sars past and present leadership, which may or may not have something to do with their own tax skeletons. There have been loads written on this issue and its larger ramifications in various publications but my pick is amaBhungane’s Sam Sole’s excellent analysis here.
Mkhwebane’s report on Ramaphosa
This was related to a R500 000 donation to his ANC presidential campaign received from dodgy company Bosasa back in 2017. He got the facts wrong in a parliamentary reply as he wasn’t directly involved in the campaign funding details (to avoid undue influence on him as President, he says) and wrote to parliament ten days later with a correction. But Mkhwebane still found him in breach for lying in parliament. There are so many odd things about Mkhwebane’s report, I don’t know where to start ? but here are a few things:
a. She extended the scope of the investigation into his ENTIRE campaign and hinted at money laundering with little evidence.
b. The fact that he raised hundreds of millions just for an INTERNAL ANC election is kinda odd… until you think about the fact that EVERY politician does this, and doesn’t declare it including…
c. Mmusi Maimane, the DA leader who brought the original complaint against Ramaphosa. In fact, after running to be the DA’s leader in its internal elections in 2015, the same as Ramaphosa, Maimane was called before parliament’s ethics committee for failing to disclose contributions to HIS campaign. The committee recommended he be fined and reprimanded. Maimane had the decision set aside by the Cape Town high court, and claims now his case is different to Ramaphosa’s because he was not running to be head of state… um.. yes.
So, as you can see, there’s a LOT of red herrings and double standards around this whole Ramaphosa donation thing. Activists have long been fighting for parties to disclose the source of their funding, and now it seems that should apply to individual politicians too – all of them, not just Ramaphosa.
Week ahead: ?
Eskom is FINALLY expected to release its annual results finally, which has been delayed because of its catastrophic financial position. The results are expected to reveal a R20bn loss. This after Treasury has been forced to fork over more money to keep the lights on – A total of R105bn over the next two years – much more than was planned in the budget speech earlier this year. Bailouts to SOEs like Eskom are pushing our debt to GDP ratio to among the highest of similar economies – emerging markets.
Treasury, however, is insisting that there are no more easy bail-outs. It has SABC hanging as it wants a turnaround plan and a chief restructuring officer in place first before the money is dished out.
This week may see the appointment of a Chief Restructuring Officer for Eskom. Finance Minister Tito Mboweni promised us one last week but we’re still waiting for the name. Hopefully, we’ll also hear who the new Chief Executive of the power utility is after the last one resigned because of the enormous stress the job entails.
Meanwhile, government is tightening the belt on civil service to save money: no more salaries linked to market rate or bonuses. This may sound like good news but a lot of these people are doctors, nurses and teachers… people we need to keep motivated. If only we could bring in the billions we lose to the illegal tobacco industry every year instead… But that’s a story for another day. ?
International news ??
If you thought out politics was bad, 0.2% of the British population chose Boris Johnson as their new prime minister. He has a history of lying, xenophobia, sexism, poor performance when he was Foreign Secretary and more. He started off by purging cabinet and flooding it with right-wingers. He’s also determined that Britain leaves the EU – even if there’s no deal in place which would be disastrous.
The good news ?
It’s easy to write off government leaders who spout Marxist rhetoric. But our new deputy finance minister holds interesting views that may bridge the ideological divides in our country. David Masondo is a committed Marxist who argues that class analysis puts capitalist investment at the centre of economic welfare. He’s also highly educated, hard-working and generally impressive. Read about him here:
We’re introducing a new feature that provides a summary and the latest update a long-running issue in our country. This week we’re looking at the country’s National Health Insurance. The report of the first phase is out and there are some interesting developments – particularly since Zweli Mkhize took over from Aaron Motsoaledi as Health Minister earlier this year.
For the NHI update, go here.
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Till next week!