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News analysis: We are dangling on the edge of a failed state


South Africa is dangling on the edge of failed statehood. We may have already slipped in and the realisation will only hit home when the ratings agencies duly plunge us into junk status at the end of the year. If there is any lingering about it, the events of the past week should have conclusively proved to us all that the presidency of Jacob Zuma has been a disaster.

It was a week in which a number of independent agents suddenly merged to produce a ghastly picture of a state that has been captured by a small but determined group of people, centred around the infamous Gupta family and their allies, with the president as their chief agent in government. A keen follower of the news would have known this since the days of Zwelinzima Vavi’s ‘political hyenas’ quote. But this week, thanks to a court application by the finance minister, the metaphorical descriptions have given way to names, and financial transactions, and a list of financial management laws contravened.

The spark was an application to the high court by finance minister Pravin Gordhan last week Friday for a declaratory order to the effect that he couldn’t intervene in a dispute between banks and their clients. In April 2016, the four major banks announced that they had closed the accounts of companies in the Oakbay group, controlled by the Guptas. In his court papers, the minister reveals how Oakbay CEO Nazeem Howa spent months nagging him to lean on the banks to reopen the accounts. He also reveals what was kept out of the public’s eye in April: the banks, observing an eye-watering R6.8-billion in dodgy and inexplicable transactions, suspected money laundering, alerted the Financial Intelligence Centre and froze the accounts.

This information was not made publicly available in April because the law only allows for it to be shared in the case of court proceedings. By naming the banks, the Reserve Bank governor Lesetja Kganyago, the registrar of the banks Kuben Naidoo and the director of the Financial Intelligence Centre Murray Michel as respondents, he invites them to air this information to the court, and to the public at large, in a legal manner.

The web of lies and obfuscation that has been spun out to explain what was happening to the Guptas is now exposed. Well, even more exposed. Oakbay CEO Nazeem Howa famously read out a letter from Standard Bank on Carte Blanche telling him that they couldn’t expose themselves and their other customers to a suspected money launderer. Anyone still attempting to sell the line that the Guptas simply have no idea why they are being targeted – or that they are the victims of an anti-competitive conspiracy orchestrated by an unnamed cabal of white capitalists – can expect to be met with a large measure of scorn. They always knew, they just wouldn’t say. They wouldn’t so much as tell the finance minister when he asked them why their problems are any of his business.

It all makes perfect sense now. The statement by mineral resources minister Mosebenzi Zwane that the cabinet had decided to set up a commission of inquiry to investigate the Oakbay account closures, and the hasty rebuttal from the presidency hours later. The unceremonious removal of Nhlanhla Nene and the attempt to install Des van Rooyen as the political head of our economy last year. The desperate attempts by the Hawks and the National Prosecuting Authority to force Gordhan to cave in – culminating in the news that they were bringing charges of fraud against him. This wasn’t just about ramming through a ludicrous nuclear energy deal (apparently with the Russians) and possibly setting up a network of graft and patronage from it that would make the arms deal look like a backyard cookie sale. It was also about trying to protect the family when the banks suspected a simply staggering level of skulduggery.

This protection bid is costing us dearly. There is no amount of damage to the economy and the state that is too great. Gordhan obtained impeccable legal advice that said that if he did what the Guptas asked, even as a part of an inter-ministerial task team, he would expose his office to the accusation of political inteference and favouritism. The repercussions from international banking regulators would have been swift, and brutal. And yet that is what he was being asked to do.

Gordhan revealed that the Guptas are suspected of having removed a substantial amount of money from the Optimum coal mine’s rehabilitation fund. Anyone who has driven through Mpumalanga, the platinum mining belt in the North West, or the northern Free State recently ought to be shaking with rage at this. The mining industry has destroyed the countryside and polluted God knows how many ecoystems and communities. To steal the money meant to fix the heavy toll that mining has on the environment is worse than just depriving the fiscus of its taxes. It is to perpetuate an unspeakable destruction upon the very land we live in, the water we drink and the air we breathe.

The revelations by the Public Protector Thuli Madonsela that Zuma and his allies had failed to cooperate with her investigation into state capture, and had in fact interdicted her so she couldn’t have her final moment on her last day in office formed the final link in the puzzle. The court application by opposition parties that culminated in a preservation order set in motion a new bizarre sequence of events. After the PP announced that the report would be kept safe by the speaker of parliament, Baleka Mbete initially balked. The reason given was that she’d have to make it available to members of parliament and thus couldn’t accept it.

But in all this doom, a silver lining emerges. The African National Congress, through the influential MP and ANC chief whip Jackson Mthembu, quickly drew Mbete back into line. She would have to safeguard the state capture report. A number of prominent ministers, including the deputy president Cyril Ramaphosa, have thrown their lot in with Gordhan. The resistance to Zuma from within the power structures is well and alive.

However, it is the actions of Gordhan and Madonsela that point to how we climb out of this grotesque mess. By seeking for an interdict, Gordhan makes it impossible for the finance minister’s office to be so easily bent to the will of the predatory cabal. If they manage to remove him tomorrow, his successor would still need to heed to the law. Madonsela’s report will not be altered, even if the new Public Protector Busisiwe Mkhwebane could have been persuadable. These actions tells us that we should not place our faith in individuals, but we should strengthen the institutions that safeguard our laws instead. This is what has been corrupted under Zuma. From the SABC, to the Hawks, and the NPA, our vital institutions of democracy have been devoured from within to allow a small group of people to feed off state resources. This is what we need to be terrified about. It may truly be too late.

But there’s yet hope. It is clear that various actors in politics, civic organisations and society at large are willing to fight for the state. It shouldn’t have come to this, but we should be very grateful that we have not been short of people willing to stand up to the plunder of the state. Madonsela is a brilliant example to this. The new Public Protector has enormous shoes to fill, and she will soon find that the public has learned to place an inordinate trust in her office. She daren’t slip up. But she will find that she will have the support of everyone – from ultra-leftists, and trade unionists, to suburban housewives and the very wealthiest of capitalists – should she choose the path of fearless resistance to state capture. The South African public is an almighty ally to have. And the public is clear about what it wants. There is no prosperity for any of our people in a failed state.

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Sipho Hlongwane
Sipho Hlongwane is The Daily Vox’s acting managing editor. A published author, columnist and reporter by training School of Hard Knocks, he has covered some of South Africa’s most vivid protest marches, wildcat strikes and press conferences. His scariest assignments were for fancy women’s magazines. He obsesses over football and popular music for fun.

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