RW Johnson: Cyril’s GNU won’t work, his dithering already hitting SA hard, costing jobs

The ANC's proposal for a "Codesa Mk II" to form a government of national unity (GNU) seeks to unify the nation and sidestep coalition burdens. However, this move could benefit smaller parties but faces resistance from the DA and Jacob Zuma's MK party. Zuma aims for a reverse takeover of the ANC with EFF support. The DA, wary of a GNU with controversial figures, must navigate economic instability and market pressures..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..R.W. Johnson.The announcement by Fikile Mbabula, the ANC Secretary General, that the ANC has decided that it wishes to convene a "Codesa Mk II" of all parties, which can then form a government of national unity (GNU), was to be expected. .___STEADY_PAYWALL___.Without doubt this will be appealing to many of the smaller parties. But the real question is how will the second and third biggest parties, the DA and Jacob Zuma's MK party, respond ? .Zuma is wily but his objective is clear: he wants MK, possibly with the support of the EFF, to conduct a reverse take-over of the ANC (what Zuma calls "Ramaphosa's ANC"). This is by no means impossible. As a result of the ANC's electoral shrinkage there are now many ANC politicians looking for a safe berth or a new home. In addition, those who have lost position, like Lindiwe Sisulu, the disgraced Speaker, Nosiviwe Mapisa-Nqakula or the ex-minister, Zizi Kodwa, may also be biddable and there are still Zuma clients like Malusi Gigaba and David Mahlobo sitting on the ANC benches. .But what Zuma wants is for Ramaphosa to make a coalition deal with the DA. This will immediately be seized on as "selling out to Stellenbosch". Already the Black Business Council is hysterically attacking the idea of a deal with the DA because of its opposition to race-based legislation (for which read BEE), while Cosatu and the SACP have also announced that the DA is the enemy of the workers. .Read more: ANC proposes unity government, sparks market jitters.When Mbeki threw Zuma out of the Deputy Presidency in 2005, Zuma's position looked hopeless but Zuma cannily played the victim and gradually assembled an invincible coalition – the bulk of the Zulu vote in KwaZulu-Natal, the ANC Youth League, Cosatu and the SACP. Plus, of course, various discontents like Ace Magashule whom Mbeki had prevented from becoming Premier of the Free State. .Zuma is now reaching for the same coalition – he already has his KZN base behind him (and a good chunk of votes in Mpumalanga and Gauteng) and he can pull across the EFF (which is still pretty much the ANC Youth League). If he can add the SACP and Cosatu plus other discontents he can hope to overthrow Ramaphosa just as he overthrew Mbeki at Polokwane in 2007. To be sure, the SACP and Cosatu are much weaker today; Malema has his own ambitions; and the memory of state capture and the rule of the Guptas also complicates the picture. But Ramaphosa is weak. He is frightened to lead and he has no base. .The DA has made it clear that it is unwilling to serve alongside the EFF but its problem is that South Africans have a naive sentimentality about the whole idea of a GNU, another Codesa, getting everyone together and so on. Just this morning Hendrik du Toit, the CEO of Ninety One, the country's biggest asset manager, was naively calling for a GNU, doubtless without realising that he was driving a stake into the DA's heart. For the DA has absolutely no interest in getting included into a GNU together with the likes of Julius Malema, Jimmy Manyi, Carl Niehaus, Gayton McKenzie – and perhaps even some remnants of the Zuma-Gupta crowd (the "Zuptas", as Malema called them). The ANC has enough crooks of its own but opening the door to that unsavoury bunch would mean handing the government over to a den of thieves. Nothing good could could possibly be achieved by such a government and the country would almost certainly not recover. .Read more: ANC is met with resistance as it leans towards unity government in SA.This leaves the DA in a difficult position. It cannot possibly agree to a GNU but it may also find it difficult to be the odd man out by refusing to attend this Codesa Mk II. However, it should stop and think. For a start, this is NOT like Codesa. The whole point of Codesa was that De Klerk had already announced the dismantling of apartheid and the coming of democracy. De Klerk was strong: the army and police were unchallenged and the whole government machine still worked well. And yet the National Party was perfectly willing to give up power. And Codesa was necessary because key actors – the ANC, SACP, PAC and others – had never participated in elections and had to be invited simply because they weren't represented in Parliament but it was realised that, nonetheless, they had some constituency. .The situation now is quite different. The ANC has so run the country into the ground that the state is failing and the ANC is in a far weaker position than De Klerk was in 1990. Yet the ANC is not offering to give up power and is, indeed, desperate to keep it. And we've just had a universal suffrage election so all the parties and their exact strengths are known. There is absolutely no need for any big get-together outside the normal system. So, since all the parties are now represented in Parliament, everything can be done within the existing institutions. Parliament itself is the big get-together. And the ANC can no longer act as the Great Convenor. It could do that when it had a large overall majority but the whole point of the election is that now that doesn't apply and the ANC has been reduced to the status of just one party among others. .Of course, everything is artificially constrained by the absurdity that the Constitution allows only two weeks before the President has to be elected. It would be sensible to ignore this: the heavens won't fall. .Instead the DA should give its full and reasoned arguments why a GNU is a hopeless idea and why the DA cannot possibly have anything to do with it. It could usefully add that the situation is extremely serious and that there is really no time or space for the ANC to go through these elephantine manoeuvres simply because it finds it difficult to accept a leadership role. Leadership means having to choose and all this nonsense about a Codesa Mk II is because the ANC doesn't want to choose. And the DA should spell out to Ramaphosa: if you want to hand the country over to the thieves, we can't stop you, but if you want to save South Africa, this is your last chance..Read more: Sean McLaughlin: How the ANC and DA can find each other.And the DA has a powerful ally: the markets. Things are already in a very fragile state. Figures just released show that bonds issued by the SOEs, which accounted for 28.5% of all newly issued non-government bonds in 2013, were down to just 11.9% by 2023. That is to say, the SOEs have been so run into the ground that they are increasingly unable to raise their own funding. In effect the markets are demanding that the government fund all the SOEs directly. But at the same time government bonds are now yielding 12%, which is to say, the government's debt is becoming unpayable. And already the banks have had to buy so much of the government's debt that the banks themselves are in danger and also unable to provide money for the private sector. Put all this together and very soon we shall face a sovereign debt crisis and an IMF bailout. .This is the big difference between now and 2005-7. Mbeki and Manuel had managed the economy tolerably well, so there was no economic crisis. So the markets exerted no pressure and Zuma was free to play his games. The situation now is very different – in good part because of the economic damage inflicted by Zuma. The markets now will be very intolerant of anything but very disciplined financial behaviour. .If, on top of those worries, the markets sense that the ANC is cosying up with the EFF and MK, they will go crazy. The Rand will plummet and so will the JSE. Capital will flow out, investments will get cancelled and unemployment will soar. Pretty quickly the markets will demand nothing less than cast iron re-assurance that the government will have nothing to do with the EFF or MK. Any dithering by Ramaphosa or the NEC will have similar results. So in a sense the DA simply has to sit still and wait and the game is bound to come back to it. The problem with that is that the longer this takes, the greater the damage that will be done. .The other problem, of course, is the sheer economic illiteracy of the ANC (and the EFF and MK). No one there will have the least notion of how serious it is to have a bond rate of 12%. It will need the Finance Minister and the Governor of the Reserve Bank to explain that this is an emergency before anyone will sit up and pay attention. But ultimately there is no escape from the economic facts of life. If the ANC dithers for long, there will be another 100,000 jobs lost. Dither longer and it's 500,000. At some point, reality dawns..Read also: .SACP opposes ANC coalition with DA and MKP, favours minority government🔒 Zuma's MK party signals coalition potential, challenging ANC's reignJacob Zuma's MK Party: Provocative rhetoric and few clear policies challenge ANC dominance

RW Johnson: Cyril’s GNU won’t work, his dithering already hitting SA hard, costing jobs

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