Zondo commission: Treasury witnesses to reveal cost of state capture

The Zondo commission of inquiry into state capture is set to reconvene on Tuesday, as more details relating to allegations that treasury was pressured into approving costly state projects emerge.

Treasury economist Catherine MacLeod will take the stand on Tuesday. Her testimony follows that of former treasury director general Lungisa Fuzile, who on Monday was asked to corroborate elements of the evidence presented to the commission by former Finance Minister Nhlanhla Nene and Public Enterprises Minister Pravin Gordhan.

READ MORE: Nuclear deal would have dealt a blow to SA economy —Fuzile

During their testimonies last year, Nene and Gordhan alleged that former president Jacob Zuma attempted to pressure them into approving expensive state projects without observing due diligence.

Their evidence also focused on the economic repercussions of the revolving door of ministers coming and going from treasury.

Gordhan said the axing of Nene in December 2015 “caused economic and financial market turmoil and a sharp depreciation of the rand.”

Nene was removed from office on December 9 2015 and replaced by ANC backbencher Des van Rooyen, who only served as finance minister for four days.

“The devastating impact of this unexpected announcement on the South African economy is estimated to be approximately R500-billion … The decision also ushered in a period of close scrutiny of institutional stability and policy certainty by global ratings agencies,” Gordhan said.

Gordhan told the commission that in the wake of his removal as finance minister in 2017, global ratings agencies “expressed their immediate concern”.

On Monday, Fuzile suggested that the attempts to sideline treasury would mean that the South African economy would be crippled by debt.

“Some people think that [government] has got a lot of money that is just sitting somewhere […] but it would have had to raise the money through borrowing,” Fuzile told the commission.

In the coming days, the commission is expected to hear evidence relating to Eskom and the damage done to the embattled power utility through the alleged influence of the controversial Gupta family.

Sarah Smit
Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.
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