🔒 Premium RW Johnson: Godongwana v Kubayi – Wednesday will show what ANC rules

South Africa’s foremost political scientist says Wednesday’s MTBPS will show us whether the ANC is preparing to bankrupt the country – or do what’s badly needed

By RW Johnson

The greatest line of division within South African politics lies not between the ANC and the DA or even between Jacob Zuma and Cyril Ramaphosa. It is the line that separates the Minister of Finance, Enoch Godongwana, from his successor as head of the ANC’s Economic Transformation Sub-Committee, Mmamoloko Kubayi.

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Enoch Godongwana, despite his early trade union and SACP career, has earned a reputation as a moderate. He was early on known for his wariness of the Guptas, his opposition to the nationalisation of the mines, his critical attitude to Radical Economic Transformation and as a supporter of Ramaphosa against Jacob Zuma. As Minister of Finance he early on advocated a policy of “tough love” towards the SOEs and latterly as a key advocate of fiscal discipline.

It is this latter role that has triggered the division. Godongwana has warned that South Africa faces a serious fiscal deficit and that there needs  to be a general cutting back of expenditure. This created consternation in ANC ranks which were relying on large spending promises to help them get through a very difficult election campaign.

Instead Godongwana spoke of cancelled appointments, of salary increases which would have to be funded from within departmental budgets, and, all too probably a shrinkage in the bloated size of the cabinet. Like any finance minister, Godongwana warned that there was no “magic money tree”, that South Africa was near the very peak of its ability to borrow and that there was simply no ignoring the simple laws of arithmetic.

Controversy was at its fiercest when it came to National Health Insurance, all set to be the centrepiece of the ANC’s campaign. Although Godongwana did not say in as many words that NHI was a dead duck, the implication was clear. No one has yet worked out what NHI will cost or how it might be paid for but everyone knows that it will, at the least, cost several hundred billion a year in new expenditure and that any attempt to raise that money in taxation will be extremely painful, indeed, well nigh impossible. Indeed, for many years now the Treasury has simply ignored NHI on the assumption that it is an impossibly expensive programme which can never realistically be afforded.

Godongwana has given some indication of how he feels by suggesting that any extra spending on health should be devoted not to NHI but to improving the lamentable state of the public hospitals. That would, he argues, be of far more practical help to hard-pressed voters. But there’s a big problem here. ANC MPs know that their voters long ago despaired of the public hospitals and that any promise to spend more on them will be greeted with utter cynicism. On the other hand ANC propagandists have built up NHI so that it means that everyone in the country can have private-level medical care – entirely free. This is, of course, complete nonsense but for the moment all the excitement is about the new, shiny and miraculous NHI. That is what voters have been promised – and ANC activists angrily say that Godongwana must “somehow find the money” to pay for it.

Godongwana’s problem is that over a period of years the ANC has worked itself up into a state over NHI. Long, long ago the ANC’s thinking on the matter departed from the realms of reality. But Godongwana doesn’t want to be the one who has to tell the excited crowds that the king has no clothes and that NHI is a mere ideological dream.

When Godongwana first said there would have to be economies, there was a powerful, primitive reaction within the ANC. Nobody at all wanted to hear about economies, about deputy ministers getting axed and all the other unpleasantnesses that the Treasury was promising. So the NEC made it clear that it didn’t want to hear any more about such matters. Meanwhile a hundred believers in the magic money tree signed a manifesto saying there must be no cuts and indeed, there must be more welfare grants. 

However, the NEC was not satisfied with that. So it instructed Mmamoloko Kubayi, as head of its Economic Transformation sub-committee, to keep a sharp eye on Godongwana so as to prevent him from coming out with any heretical realism. This is now the key political divide. The NEC is known for its complete economic illiteracy and in that respect Ms Kubayi is its perfect representative. She has had no economic training or education at all, whereas Godongwana has a degree in financial economics from London and he is flanked by the Treasury’s best brains. And everything will come to a head on November 1 when Godongwana has to make his Medium Term Budget Policy statement. 

But what of the President ? Clearly this issue could split his cabinet and the scope for damage if an ill-considered NHI is rammed through could easily sink his government.  Ramaphosa seems to have understood this and has been asking some searching questions about how exactly NHI is to be funded. But otherwise he is simply missing in action. Although this is the question on which his entire government depends, he has said not a word either for or against fiscal discipline. Instead he has dressed up in Palestinian headscarves and enjoyed acting the pantomime of South Africa’s (completely imaginary) mediating role in the Middle East. Presumably at some point before November 1 the President has to get off the fence. Or maybe not: perhaps he will keep trying to be all things to all men.

The problem is that while Godongwana is quite an expert at arriving at a vague form of words which squares the circle, this is a gunfight at OK Corral. If Godongwana emerges as clearly the victor then Kubayi’s career will not easily recover. And vice versa. Probably what one should expect is a form of words which leaves the issues unsettled. But which, over time, clearly favours one side or the other. If that is the case expect the President to speak on both sides of the issue until the matter is settled.

The question is when will that be ? It could easily be well after the election. Kubayi’s advantage is that she clearly has the bulk of the NEC on her side now. But Godongwana’s advantage lies in the sheer facts of arithmetic. He could allow Kubayi to win now, secure in the knowledge that the arithmetic could pull her position apart before long. 

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