EDINBURGH — The London-headquartered Financial Times reports that President Cyril Ramaphosa is under growing pressure to fire Nhlanhla Nene, the finance minister who appeared to have fought against corruption in the Zuma era but in fact was involved in secret talks with the Gupta family. In addition, as The Sowetan reports, the public protector will investigate a possible breach of the executive code of ethics by Nene in connection with allegations surrounding a Public Investment Corporation investment in S&S Refinarias. This reportedly included a $1.7m ‘referral fee’‚ which may have benefited the minister’s son‚ Siyabonga Nene, says The Sowetan. The graft scandal that has erupted around Nene is bad news for South Africa’s credit rating status, cautions the FT, as the world braces for another finance minister. – Jackie Cameron
By Thulasizwe Sithole
South African president Cyril Ramaphosa is under growing pressure to remove his finance minister, Nhlanhla Nene, for failing to disclose meetings with the business family at the centre of the country’s biggest post-apartheid scandal, reports the Financial Times.
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Nene apologised last week for holding private discussions with the Guptas, friends of the former president Jacob Zuma, at the peak of their alleged influence on state contracts, the pink paper tells its global audience.
“Mr Nene begged for South Africans’ forgiveness over what he called ‘poor judgment’. He said he should have revealed sooner that he met the Gupta family between 2010 and 2014, when he was deputy finance minister and then head of the Treasury.
“Opposition parties have demanded a speedy decision from Mr Ramaphosa over the finance minister’s fate. Mr Ramaphosa took over Mr Zuma’s corruption-hit presidency this year with a promise to show zero tolerance for impropriety in government and the ruling African National Congress,” says the FT.
“We simply cannot afford the uncertainty that would surround what would effectively be a ‘lame duck’ finance minister who may, or may not, have the full support of the president,” it quotes David Maynier, the main opposition Democratic Alliance’s finance spokesperson, as saying.
Nene is also facing accusations that South Africa’s Public Investment Corporation, which manages the state employees’ pension fund, gave improper support to his son over a business deal when he was its chairman, highlights the FT. Nene has denied wrongdoing and has welcomed an investigation of the claims.
I would want Nhlanhla Nene to stay on, pending the investigation into his son and the PIC. But accepting his resignation would give Ramaphosa the perfect argument to also fire Dlamini, Mokhonyane, Gigaba et al #NENE
— Max du Preez (@MaxduPreez) October 8, 2018
“The scandal over Mr Nene threatens to spark more instability in South Africa’s public finances just two weeks before a crucial statement will be delivered on the medium-term budget. Misrule under Mr Zuma and stagnation in the economy, which has plunged into recession this year, has left South Africa’s Treasury scrambling to plug a shortfall in revenue,” the paper cautions.
Nene’s fall from grace is even more embarrassing for Ramaphosa’s reform efforts because he has been widely praised for resisting Zuma’s demands to approve state contracts that allegedly would have benefited the Guptas. “Last week Mr Nene told a judicial inquiry examining the alleged ‘capture’ of state institutions that his refusal triggered his abrupt firing by Mr Zuma in 2015.
The FT points out that the Treasury is battling to avoid losing the country’s last investment-grade credit rating, at Moody’s, which will decide later this month whether to retain it.
Fellow South Africans, if you want to test the authenticity of your reaction to the #NhlanhlaNene 'apology', here's a quick test.
Substitute the word Nene in the press release with Zwane/Van Rooyen/Molefe/Gigaba/Brown… Then see what changes.
Let me know how it goes. Thanks.
— Khaya Sithole (@CoruscaKhaya) October 5, 2018
“Other rating agencies downgraded South Africa to junk status last year, citing the turmoil in the ANC under Mr Zuma and sluggish economic growth.
“If Mr Nene leaves office, his successor will be South Africa’s seventh change of finance minister in four years.”
The FT quotes opposition politicians, including Julius Malema, leader of the Economic Freedom Fighters, a radical leftwing ANC breakaway, as calling for his axing.
Pravin Gordhan, the public enterprises minister, told the Financial Times that the ANC was not beyond repair despite the latest scandal over Nene. “There’s a recognition within the ANC hierarchy that there’s a problem,” he said. “Whether its violence or corruption or just poor management of public institutions you lose the confidence of the public,” said Mr Gordhan.
