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Sep 10 2008

Why I’m so negative on the rand

Published by at 4:09 pm under Opinion,South Africa

First published on my old blog on 29/11/2007. Ten months later it’s still a good one.     

This interview was published on the respected Moneyweb website this morning. Read it to get a feel for the “choppy times” ahead for South Africa’s economy and currency. 
The worst case scenario for the South African presidency

Felicity Duncan
29 Nov 2007 12:53

Imagine the following bleak scenario: Jacob Zuma wins the ANC leadership race, and is then successfully prosecuted for corruption. He is unable to take up the presidency in 2009, creating a leadership vacuum and embarrassing the country no end.

This is a possible nightmare scenario sketched by author and former ANC MP Andrew Feinstein. 

Speaking to the Moneyweb Power Hour, Feinstein said: “If Jacob Zuma was to win the ANC presidency at Polokwane, he wouldn’t be the country’s president for a while, and the corruption charges hanging over him, his having lost two appeals, means that I assume he is going to be charged at some point in the new year. So you could have a situation where he has defeated Thabo Mbeki, where he is the ANC president, where he then faces corruption charges.”

And the charges may be pretty solid.

“If one looks at the Schabir Shaik trial and the fact that the prosecutors in that trial wanted to charge both Zuma and Schaik together, because a number of the offences were allegedly committed together one would assume that there must be some possibility of his actually being convicted. So the scenario that we could have is one of Jacob Zuma becoming ANC president, of standing trial during the course of next year, and obviously, if he is found guilty in that trial he is not going to be able to stand for the country’s presidency in April 2009.”

Zuma certainly looks like the best horse in the ANC’s leadership race right now. The Women’s League went for him, businessman and potential rival Tokyo Sexwale has endorsed him, Cosatu and the Youth League seem firmly behind him. He has successfully presented himself as the most poor-friendly choice, and his status with the more leftist parts of the ANC (including Cosatu and the Communist Party) is solid. 

He looks pretty unbeatable. So let’s assume he is the ANC’s choice next month. This brings us to the dark possibility of Zuma facing successful prosecution on corruption charges while head of the ANC. People convicted on criminal charges cannot be members of parliament, so a convicted Zuma could not assume the presidency. That would be pretty awkward for the country, and certainly would not do too much for our international standing.

However, the alternative – that Zuma is not be prosecuted for corruption because he is the ANC president – would be even worse.

“I would hope very strongly that if he were to win the presidency of the ANC that would in no way affect whether he is charged with the fraud and corruption offences by the National Prosecuting Authority if they believe they have significant evidence against him. And clearly after he lost his two appeals against them being able to use evidence that they collected in search and seizure raids on his house and offices, and also being able to access the original copy of the so-called encrypted fax that was sent from Thomsons to Schabir Shaik about the R500 000 that Zuma was allegedly promised to stop Thomsons being investigated. If they have that evidence, I would be very worried indeed for the state of South African governance if Zuma’s accession to the ANC presidency were to stop those charges being led in court.”

Already, Cosatu has threatened to take to the streets in strike protests if the NPA bring corruption charges against Zuma. Obviously, this would seriously undermine the process of justice in South Africa. If there is evidence enough to convict Zuma he should be prosecuted.

Corruption scandals have been plentiful in the last few years. Corruption monitoring site Global Integrity provides a “corruption timeline” of events in recent South African history. Most notable among them is the ongoing arms scandal.

The arms deal and its implications have become something of a cancer in the ANC. Feinstein, a former ANC MP, resigned in 2001 in protest against the cover-up of the arms scandal. He believes that the arms deal, in which billions of rands in kickbacks allegedly went to the ANC and several individuals, was the beginning of a bad period for the organisation.

“What has happened is that the arms deal was the point at which things started to go wrong within the ANC, at which people started to feel that it was OK to do deals in this way. And, you know, we saw a whole lot of things subsequent to that.”

“We saw the whole oilgate saga. We saw all sorts of question marks around Cell C, we’ve seen all of the Selebi stuff recently, we’ve seen various people in government involved in all sorts of business deals in which there seems to be a fairly obvious conflict of interest.”

However, Feinstein believes that this leadership race offers a golden opportunity. 

“I think we’re reaching a point at which people in the ANC, unconnected to both Zuma and Mbeki, need to stand up and say, “Enough is enough, and we need to clean up our act because otherwise the consequences for the country are extremely damaging.”"

“And that’s why I think that if the outcome of what’s going on at the moment was that that both Mbeki and Zuma found themselves to be “politically undesirable”, that would ultimately be in the best interest of the ANC and South Africa, because I believe we will only move beyond the very tawdry and unsavoury few years that we’ve gone through once those two main protagonists are actually removed from the political scene, and once we have some new blood leading the ANC.” 

“And until such time as that happens I think, one, things are going to be quite volatile and uncertain. And, two, there are going to be all of these suspicions.”

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