SA Political Economy: The Zuma-Gordhan Fog is Lifting- slowly!

SOUTH AFRICA - In Brief 02 Sep 2016 by Iraj Abedian

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After weeks and weeks of ugly spats between the warring factions within the ANC, and following two weeks of non-stop political wrestling between the President and the Minister of Finance, today the Cabinet made its first statement, indicating some kind of a truce; or at least the end of open political bullying. Of the three key and critical issues, today the Cabinet announced a new board of directors for the SA Airways (SAA) with a reasonable stalemate membership. Whilst the controversial chairperson, Ms Dudu Myeni was retained, the rest of the board is made of professionals with solid credentials. The former is a nominee representative of President Zuma, and the rest largely acceptable to the Minister of Finance. This paves the way for the National Treasury to issue the five billion rand guarantee that the airline needs before September 5th, 2016 to stay in business. Whilst this is no outright win for the Minister of Finance, he has managed to put adequate braces within the Board to contain the chairperson's patrimonial urges. During this past week, the ANC has also been hard at work to stop the open warfare within the Cabinet, and between some government departments and the key SOEs, namely Eskom (energy) and Denel (arms manufacturer). The Parliament too moved into action to protect the national interest by calling to account some of the wayward SOE executives who had made expressed unseemly disregard for accountability to the National Treasury. At the same time, for the first time in decades, a key local capital market player, Future Growth, suspended further lending to five SOEs on account of poor governance, insufficient skills and potential breaches of fiduciary ...