Jacob Zuma plays Russian roulette with our weak economy

The long-awaited Cabinet reshuffle has finally happened. Almost a third of the ministers have been laid off.

This is unprecedented. Its rationale, according to President Jacob Zuma, is to promote efficiency and bring about a better life for all South Africans.

But what is even more important is the genesis and pathology of this Cabinet shake-up. At the funeral of the late Uncle Kathy, as Ahmed Kathrada was commonly called, former deputy president Kgalema Motlanthe recalled the words of the now famous letter by Uncle Kathy in which he reminded President Zuma that “the position of president is one that must at all times unite this country behind a vision and programme that seeks to make tomorrow a better day than today for all South Africans. It is a position that requires the respect of all South Africans, which of course must be earned at all times.”

The antithesis of this invocation is even more telling. It is the responsibility of the president not to consciously do anything that will promote anxiety and fear among the citizens. He must be “the embodiment of the Constitution” that gives hope to all South Africans that conditions shall be created by government that will provide equitable opportunity for self-expression and development for all.

Yet, we are faced with a situation where the president, for the second time, has made a reckless and irrational decision to torpedo efforts aimed at promoting confidence and trust among our foreign lenders and development partners that we are on course to maintain stability in our political economy and predictability in our policy landscape.

What is fundamentally disturbing is that the first disruption of the economy by the president in December 2015, in what is now known as “Nenegate”, was justified on patent untruths. What followed was a meltdown and the rand went into free-fall. We are informed that the top six in the governing ANC put the president under caution not to make decisions that undermine the stability of the political economy.

What is bewildering this time around, according to Gwede Mantashe, the secretary-general of the ANC, is that the reshuffle was effected despite opposition from the top six.

We are informed that the motivation for this drastic action was triggered by a doubtful “intelligence report” claiming that the just-fired finance minister Pravin Gordhan was at the centre of a plot to turn international bankers against the president. Again the efforts of “Team SA”, aimed at promoting confidence and trust among our investors, were torpedoed by the president on the basis of an untruth.

What is patently clear is that the driving motivation for the reshuffle was to remove Gordhan from the finance portfolio. The other changes are merely intended to shift attention from the main purpose.

The outcome is also patently clear. The economy will certainly go into free-fall and a ratings downgrade is now almost a certainty.

It is the responsibility of the government, and especially the president, to lead a co-ordinated effort to protect this commodity at all times by leading a stable political economy. The irony is that he has been leading an effort, for more than a year now, that has brought business partners on board, to work with government, to plan and do everything necessary to assure our investment partners and the rating agencies that we are on course to positively address our growth challenges and ensure the stability of our political economy.

In the 21st-century world of instant communication and free movement of capital across borders at the push of a button, the biggest challenge is for democratic governments to maintain political stability and a positive investment climate that can attract investment that creates economic growth. In the case of SA — with a low savings rate, a declining business confidence index (at 90.3, it is the lowest since 1985), extraordinary and structurally high and growing unemployment, racialised wealth inequality (10% of the population owns 95% of the wealth), a labour participation rate that is at least 20% lower than competitor countries, and a youth population that is at least 57% of the unemployed — a stable and positive investment climate is a priceless commodity.

The legacy of our apartheid past has imposed an inordinately binding responsibility on the democratic government to ensure that we put in place a capable state with competent leadership at all levels to deliver equitably and effectively to all the people of SA as articulated in our Constitution.

This administration has failed spectacularly to achieve a semblance of a capable state. The cabinet changes have finally undermined all hope of building strong foundations for a capable state because the most under-performing ministers have been retained.

Failure is everywhere. Our biggest state-owned enterprises are centres of unmitigated looting. Eskom dishes out numbing evidence of looting almost on a weekly basis.

The biggest risk arising out of this reshuffle is the potential fracture of the ANC. The president has now surrounded himself with very trusted allies as he faces off the looming revolt from the other faction of the party that is opposed to him.

At the heart of this conflict is the battle to control decision making in the Treasury for the purpose of accelerating the feeding of the patronage network before December 2017.

As I opined in September 2016, a constructive implosion of the ANC is now unavoidable.

• Motsohi is an Organisational strategist at Lenomo Strategy Advisory.