The ANC's newest Eastern Cape crisis

An African National Congress document circulating in the Eastern Cape has warned that the province is entering “a phase of political instability” that threatens the social and economic development programmes of the poverty-stricken province.

The crisis in the ranks of the organisation is so serious that this week the ANC’s Secretary General, Kgalema Motlanthe, and the Eastern Cape provincial chairperson of the ANC and Sports Minister, Makhenkesi Stofile, travelled to the province to try and quell the discontent in the party.

The memorandum, titled A Discussion Document: The Current Political Situation in the Eastern Cape, reflects the widespread view in the province that efforts by Premier Nosimo Balindlela to purge the provincial government of individuals loyal to Stofile — whom she replaced — has sparked off a fierce faction fight in the alliance.

“What we are witnessing is the wholesale dismantling of institutional and administrative leadership, supposedly, it can be assumed, aligned to former premier Stofile,” says the discussion document.

“It is evident that we are entering a phase of political instability in the province. The consequence for growth and development is significant. This instability threatens to heighten as we enter the local government election campaign, and will no doubt be exploited by opposition and counter-revolutionary forces.

“The strategic question now turns around damage limitation and whether the unity and coherence of the alliance can be salvaged.” The document — which only began circulating this week — is presumed in ANC ranks in the province to have been drawn up by supporters of Stofile.

During the past month Balindlela dismissed the province’s finance minister, Enoch Godongwana, and suspended provincial treasury head Monde Tom “to allow for an investigation into the provincial finances”.

It is believed, however, that even though Godongwana was unable to control the provincial purse — the Eastern Cape’s projected over-expenditure in the current 2004/05 financial budget is R2-billion — his dismissal was the start of the purge of individuals close to Stofile, who fired Balindlela when she was the province’s education minister.

In another startling move last Thursday, the economic affairs, environment and tourism minister, Andre de Wet, sacked the entire Eastern Cape Development Corporation (ECDC) board and suspended the corporation’s CEO, Mcebisi Jonas, and the chief financial officer, John Cerff.

The axing of the ECDC board followed a forensic investigation, commissioned by De Wet, into the sale of the Mpekweni Resort, near Port Alfred, by the ECDC to a business consortium for R9-million, when other bidders were apparently set to pay more.

De Wet has replaced the board under the chairmanship of advocate Naledi Burwana-Bisiwe.

The move sent shock waves through the province’s business community.
“Our concern is stability in the province because such a drastic move will chase away investors,” said Thembelani Nodada, the provincial president of the National African Federated Chamber of Commerce.

“If these actions are in the name of clean governance then we fully support the MEC. However, the public need to be provided with reasons for the dismissal of the entire board.”

The forensic report has been handed to the South African Police Service’s serious economic offences unit in Pretoria. De Wet said that information will be made public “as we see necessary”.

But this culture of secrecy is fuelling endemic suspicion that the spate of dismissals and suspensions in the province are politically motivated.

“It appears that leadership, governance and institutional capability is being dismantled on the basis of narrow political criteria, rather than issues of efficiency and competence,” says the discussion document.

“This, coupled with the financial cutbacks and the failure to address poor performance where it is apparent, threatens to return the province to the service delivery crisis of 1997/98 — this time without a cohesive political and administrative leadership to pull us through.”

In those years the National Treasury invoked Section 100 of the Constitution, which empowers national government to take over the running of a province when it cannot fulfil its executive duties.

The Mail & Guardian reported last week that the province’s new finance minister, Billy Nel, has instituted a sweeping review of the budgets of every government department and entity, aimed at “solving cash-flow problems in the province”.

This includes the possible withdrawal of up to R220-million annually from the Coega Development Corporation.

The M&G has seen a copy of the provincial treasury’s plan called 1st Phase Budget Belt-Tightening Exercise, which says: “The Treasury recommends that the departments start identifying savings from firstly, administrative expenditure ... and then proceed to core departmental specific functions.”

This includes an assessment of the budgets of “public entities and/or business enterprises”, an across-the-board suspension on the filling of vacant posts, and a freeze, until the end of the year, of all infrastructure and capital projects not yet on tender. These include school and clinic building projects.

While the plan is laudable in that it calls for cost-cutting in areas such as air travel, cellphones and departmental entertainment by up to 60%, “the treasury’s current crisis management proposals are short-term, unplanned for, and likely to plunge service delivery into disarray,” said Vuyo Tetyana, the head of the performance monitoring project within the Public Service Accountability Monitor in Grahamstown.

“Government’s planning and budgetary cycles are ordered in such a way as to preclude precisely this sort of crisis management. Furthermore, the Constitution requires that budgets in each sphere of government contain ‘proposals for financing any anticipated deficit for the period to which they apply’.”

This cost-cutting exercise has renewed racial tensions in the province: Balindlela replaced Godongwana with Nel, a former New National Party leader who first defected to the United Democratic Movement and then to the ANC.

“The province’s investment decisions have been placed in the hands of an individual with untested leadership ... and no history in the [struggle] movement. [This] threatens to exacerbate the current financial woes in the province,” says the discussion document.

Smuts Ngonyama, the ANC national spokesperson, said that at a national level the party is dealing with “certain complaints in the province” but that the management of the government is the “prerogative of the premier”.

There is still a pervasive concern in the province that Balindlela’s “strings are being pulled [from] elsewhere” and that she is out of touch with the working-class ideology of the alliance.

“The provincial-national dynamic [in the province] has at all times served to fuel rather than manage factional tensions within the province ... [which] has meant that the overall interests of the ANC in the province has always been relegated below narrow factional interests, particularly when the premier does not have sufficient clout in the organisation,” said the discussion document.

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