President Jacob Zuma is back into a corner with only one option remaining to him in the political war being waged in SA — a scorched earth policy — and this makes for an extremely unpredictable political environment.
This is the view of Nomura analyst Peter Attard Montalto.
"We appear to be entering the political endgame in terms of the current political ‘war’," he writes in a research note, "but in this vortex of risks on all fronts things are ultimately unpredictable because the key protagonist – President Zuma – is in a weakened state with only a ‘scorched earth’ strategy remaining to him.
"We think parliament should be watched particularly closely."
The research note identifies the ANC’s last national executive committee meeting as the "seminal moment", one that enabled senior leaders to publicly declare their support for Finance Minister Pravin Gordhan after the National Prosecuting Authority announced charges against him last week.
"It meant the ANC was in a much more fractured state when the NPA press conference on Pravin Gordhan's charges took place, and so senior internal leaders could come out in support of Gordhan and tacitly oppose Zuma. The most significant evidence of this was this weekend with [Deputy President] Cyril Ramaphosa backing Gordhan," Attard Montalto says.
After Gordhan’s latest move — the request for a declaratory order that he is not obliged to intervene with SA’s banks on behalf of the Gupta family — the Zuma faction can be expected to launch a counterattack, he says.
While Zuma has lost momentum in his campaign to force Gordhan out, showing again that his weakness is timing, Attard Montalto warns not to underestimate Zuma’s appeal "to a particular internal constituency that the market struggles to understand", nor his capacity to do something "irrational".
Attard Montalto says Parliament is the "most significance force to watch" now, with a split in the ANC caucus since the last NEC meeting — though the party would probably close ranks around the president in the event of a no-confidence motion.
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