Dear investors, the SA system is working

If correctly analysed, President Jacob Zuma’s about-turn on paying for the upgrades at his Nkandla homestead should boost investor confidence, says Professor Steven Friedman, director of the Institute for Democracy.

Friedman spoke to Moneyweb on Wednesday, after the release of a statement by the Presidency the previous night in which Zuma offered to pay back some of the R250 million spent on the “security upgrades” to his homestead in KwaZulu-Natal.

After investigating the matter Public Protector (PP) Thuli Madonsela earlier found that save for five features (the amphitheatre, visitors’ centre, cattle kraal, swimming pool and chicken run), Zuma did not benefit personally from the upgrades.

Madonsela’s report said remedial action should be taken that would see the South African Police Service and Minister of Finance determine the reasonable cost for the features and the portion of that which Zuma should pay.

He has so far refused to pay anything and has instituted other measures to deal with the issue. In reaction the Democratic Alliance (DA) and Economic Freedom Fighters (EFF) challenged Zuma’s actions in the Constitutional Court as being unconstitutional parallel processes to that contained in the PP’s report.

This case will be heard on February 9, two days before Zuma’s State of the Nation Address.

Friedman said Zuma most likely got advice from his legal team that his chances of winning the case were slim – hence he did what is done daily in numerous court cases countrywide. He tried to settle.

The case is in essence about the powers of the PP. Previous rulings in the Supreme Court of Appeal (SCA) were consistent that her remedial action may not be ignored – as Zuma is accused of doing.

Zuma is definitely on the back foot, but one should not over-estimate this and give the impression that he acts on his own, Friedman says.

Zuma is part of a faction within the ruling ANC, he says. This faction got a bloody nose in December when Zuma fired former finance minister Nhlanhla Nene and appointed Des van Rooyen in his place. His faction was confronted by a coalition that included everybody from Cosatu to the commercial banks and he had to backtrack and replace Van Rooyen with trusted former finance minister Pravin Gordhan.

Friedman says while Zuma’s faction was weakened, it did not go away and will still be trying to influence the choice of Zuma’s successor.

Investors at the time misread the situation, Friedman says. “It is not about what it means for Zuma’s future, but about the system. It shows the system works”, he says.

His latest statement about Nkandla shows that “Zuma is not superman. He has been forced to pay back the money after previously saying publicly that he won’t,” Friedman says. “It should give investors comfort that a politician cannot do whatever he wants.”

In the current battle for the future of the ANC it looked up to December as if the Zuma faction, based in rural areas and focused on using private wealth to amass public power and public power to amass private wealth, was winning.

The Nene debacle put the faction on its back foot and now it had to retreat on Nkandla, Friedman says. He says this may signify a turn in the tide and shows that the Zuma faction cannot do what it likes.

He says the EFF should take a lesson from the fact that all its noise and disruptions in parliament did very little to bring Zuma to account, but using the legal system did.

Likewise the DA should realise that its traditional style of opposition politics bears more fruit than imitating the EFF’s antics.

The DA indicated on Wednesday that it wants to see Zuma in court and accused him of creating another parallel mechanism by proposing that the Auditor-General and the Minister of Finance should determine the amount he should pay.

The EFF will hold a media briefing in Johannesburg on Thursday.

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