SA Minister of Finance Under Political Pressure Again

SOUTH AFRICA - In Brief 24 Aug 2016 by Iraj Abedian

---

Yesterday afternoon, the SA organised crime fighting unit, The Hawks, revived their public pressure on Mr Paravin Gordhan, the SA Minister of Finance. Whatever the legal merit or otherwise of the Hawk's case against Minister Gordhan, the real reason for piling political pressures on him has serious political tentacles too. Ever since his re- entry into the Ministry on December 2015, Minister Gordhan has been vocal about his opposition to some major and expensive projects such as the SA Airways, the controversial nuclear power project, and a few other mega projects with considerable fiscal impact. Expectedly, by holding the fiscal line the Minister has come to challenge President Zuma's close allies in these project. Since January 2016, there has been a quiet proxy war going on between the National Treasury and some of these key State-owned enterprises (SOEs), as well as the SA Revenue Services (SARS) controlled by the President's allies. Now that the local government elections are over, and the ANC has registered a serious setback with blame piling on the President for it, the President appears to be bent on 'doubling down' on his patrimonial and extractive strategies. This means creating enough public and political case against the Minister of Finance as a pretext to remove him in his forthcoming Cabinet reshuffle. His removal will open the National Treasury to potential fiscal plunder. Whilst the SA constitutional framework is solid enough to protect outright abuse, the cost of litigation and the delays involved in such cases will mean massive damage to the macroeconomic stability. One immediate impact may well be a credit downgrade of the SA government to the junk s...