THE SHAKE-UP: Nene falls as Gupta meetings return to haunt him

Erstwhile Finance Minister Nhlanhla Nene. Photo: Reuters

Erstwhile Finance Minister Nhlanhla Nene. Photo: Reuters

Published Oct 10, 2018


JOHANNESBURG – Finance Minister Nhlanhla Nene yesterday became the most unfortunate casualty of the Gupta web of deceit.

Nene, a decent and affable bloke by all accounts, fell on his failure to take the country into his confidence about his interactions with the Gupta brothers. His disclosure at the Justice Raymond Zondo State of Capture Inquiry that he met the Guptas at their Saxonwold compound more than once came back to haunt him.

Here was a man who we all cheered for saving us from indebtedness to the Russian nuclear deal, which would have enslaved us for generations, telling us that our trust in him was misplaced.

Some of his meetings with the Guptas took place when the family was already declared a national parasitic irritant by most South Africans.

And when his chair literally collapsed under him, the fall ushered in another sad day for a country that had been lied to repeatedly by the likes of Mosebenzi Zwane, Des van Rooyen and Faith Muthambi. It also cast aspersions on the kind of leaders we produce as a country. Mind you, our standards had become measurable through the Markus Joostes, Trevor Hooles and Hlaudi Motsoenengs of this world.

Even our moral compass had been championed by charlatans such as Paseka Motsoeneng, André Olivier and Lethebo Rabalago.

And therein lie our problems.

We have reversed from a beacon of hope that the world once saw us as.

We have normalised and made it acceptable to be treated in the worst manner possible by those we are supposed to hold accountable.

Yes, Nene was man enough to own up for his visits to the Guptas. He even asked the country to forgive him for this, and requested President Cyril Ramaphosa to relieve him of his duties. He also availed himself and his family to be subjected to any inquiry on graft.

His apology is as rare as honesty in South Africa’s body politic.

And for that he should be commended.

But the apology failed to take into account our right as a country to know how the Guptas managed to launch such a brazen heist on South Africa’s sovereignty and got away with what Public Enterprises Minister Pravin Gordhan estimates to be a R100 billion loot.

Nene should have known better.

His position as finance minister made him the chief executive of that entity called South Africa Incorporated (SA Inc).

It gave him keys to the public purses, and any oversight on his part was bound to have far-reaching implications for us as shareholders of the SA Inc.

We saw the results this week.

The rand, which is a measurement of our exposure to the outside world, flirted with R15 against the dollar on uncertainties over his future.

The yield on benchmark government bonds rose to levels last seen under former president Jacob Zuma’s reign as the executive director of SA Inc. The banking stocks are still in the red as a result of his misjudgments.

This just two weeks before he is supposed to deliver what is probably the country’s most important Medium-Term Budget Policy Statement (MTBPS) that is supposed to give meaning to Ramaphosa’s stimulus package.

Now Tito Mboweni will have to assure investors that the country is on a new recovery path that is centred on fiscal prudence.

He will have to assure ratings agencies that the economy has managed to crawl from near collapse to a country worth investing in.

This week’s announcement by rating agency Moody’s would have, in all probabilities, already factored in developments before Nene’s admission.

It is unlikely that they will change their view on South Africa’s credit rating.

The international ratings agencies would be far more interested on what the MTBPS says about the country’s future fortunes as an investment destination.

Any failure by Mboweni to send a message of stability could lead to worse capital outflows than the ones we experienced when former president Jacob Zuma fired Nene for refusing to sign the nuclear deal and cracking the whip on SAA.

It could trigger much bigger jitters on our economy at a time when investors have adopted a dim view on emerging economies. The world has become particularly intolerable of emerging economies.

Across the seas in Turkey the lira hit record lows, shedding more than 34percent of its value against the dollar after President Recep Tayyip Erdogan embarked on a mission to capture the country’s central bank.

The stock market also fell 17percent, while government borrowing costs rose to 18percent a year and inflation hit 15percent.

In Argentina, the peso fell nearly 50percent after the government unexpectedly asked for the early release of a $50billion (R741.78bn) loan from the International Monetary Fund two weeks ago, extending pre-existing fears over the country’s weakening economy and inflation running at 25.4percent this year.

South Africa is already battling to contain the fallout from the 1percentage point increase in VAT that was brought about by the escapades of one Tom Moyane.

The international trade factors have also not given us any respite, with US President Donald Trump’s adventures pushing us further into the red.

As tempting as his resignation sounds, it will remain just a populist reaction that failed to take into account the bigger implications of his actions on our economy.

At best, Nene needed to have taken us into his confidence and told us what he discussed with the Guptas at their family home.

He needed to come clean on whether he had any contribution to the Guptas’ rise from a negligible immigrant family that moved from a spaza shop-like computer business into a billion rand conglomerate.

He needed to tell us whether he had any influence on his son’s dealings with the Public Investment Corporation.

Nene may not have been the panacea for all the problems that have pushed our economy into a moribund state. However, his inability to level with us has left us no wiser on how the Guptas raided the national coffers. It also denied us an opportunity to decide whether to forgive him for what he asked to be forgiven for.

As Ramaphosa put it, we need to know all those who helped the Guptas to capture this country in order for us to move forward.


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