ANALYSIS: SA may put up with ANC. No one else will
The investment partners' now-infamous memo was just stating the obvious. So why the ANC's over-the-top response?
The ANC and government’s reaction to a memorandum compiled by five major investment partners about the obstacles to new funding has been more piercing than anything they have said against the perpetrators of grand corruption that drained hundreds of billions from the fiscus.
In fact, the art of diplomacy is exercised more internally so as to not offend those implicated in allegations of state capture, than in relation to some of the world’s most powerful nations.
Minister of international relations and co-operation Lindiwe Sisulu issued a diplomatic rebuke against Britain, Germany, the US, The Netherlands and Switzerland for the distribution of a memorandum to President Cyril Ramaphosa’s officials.
The ANC accused diplomats from the five countries of communicating with SA in “a threatening and bullying tone”.
It claimed the memorandum, setting out requirements for improved investment flows and issues that “need to be tackled by government as a matter of urgency in order to lift existing obstacles to foreign investment in SA”, constituted “interference”.
“The ANC condemns this dramatic holier than thou stance of these former colonisers, and we would not like to relate to them on the history of master-slave relations,” said a statement issued by the party’s acting national spokesperson Zizi Kodwa. The extraordinary fallout is informed by events behind the scenes and dynamics between the presidency and the department of international relations and co-operation.
The ANC’s statement claiming the investment memorandum was a surreptitious attempt to influence the outcome of the elections appears to be capitulating to the Zuma-aligned faction that often blames SA’s problems on “western imperialist forces”.
Surprisingly, there is even paranoia among those aligned to Ramaphosa that the document was handed to several senior officials in the presidency since last year as a precursor to “disinvestment”. When Ramaphosa announced his investment drive in April last year, he underlined the sharp decline in investment in recent years.
“Foreign direct investment declined from around R76bn in 2008 to just R17.6bn last year. This has been driven by low business confidence and regulatory uncertainty, and has resulted in slow growth, along with poor growth in employment.”
Ramaphosa announced that his four “investment lions” would go hunting for new investments across the globe. He also appointed Trudi Makhaya as his economic adviser and point person on investment.
It seemed strange that Ramaphosa was outsourcing this work from an overstocked economic cluster in cabinet. The rationale was that the investment drive was a presidential flagship project and, rather than the usual government sales pitch, recognised financial heavyweights such as Trevor Manuel, Mcebisi Jonas and Jacko Maree were needed for high-level engagements with investor and diplomatic communities.
As the investment lions went about their roadshows, the impediments to investment were repeatedly raised. Among these were regulatory concerns, policy confusion, the visa regime, political uncertainty, crime and entrenched corruption.
The caveat is that the envoys do not sit on any decision-making structure and have no way of influencing government action or policy. They, as well as the investor community, have to channel issues through Makhaya.
But Makhaya is perceived as a “political lightweight”, and some people who interacted with her became frustrated that she was not able to give insight into government strategy or answer questions on how the problems would be tackled.
Makhaya’s direct interface with diplomats also caused friction with Dirco. Sisulu’s reaction to the diplomats’ memorandum was fuelled by her irritation about her department being iced out.
But Makhaya and the envoys became glorified “agony aunts” rather than champions who were able to fast-track investment projects.
Meanwhile, SA has been making big news around the world. The testimony at the Zondo commission is revealing audacious levels of corruption that have contaminated the state system.
The question being asked everywhere is what will happen to the perpetrators. The stock response is that the various commissions need to run their course and we also need to wait for everyone to have their say.
This is despite the fact that commissions are inquisitorial and their work is confined to certain terms of reference. Commissions do not inhibit concurrent prosecutions.
But there is not a single state capture or serious corruption case on any court roll. The two cases where charges were brought, the Estina dairy farm and the Duduzane Zuma matter, were bungled and withdrawn.
There are unrealistic expectations about what new NPA head Shamila Batohi can pull off when she has to first clean out the rot in her own institution to compose winnable cases.
Members of cabinet and MPs implicated in the state capture inquiry continue to serve in their positions untroubled. Some of them, such as Nomvula Mokonyane and Vincent Smith, are on the ANC’s election list for the National Assembly.
The ANC has a new vetting system, but party leaders cannot say categorically whether allegations such as receipt of bribes and lying under oath discount people from returning to parliament.
Former president Jacob Zuma, a central figure in the state capture project, claims he has not been implicated, and is on the campaign trail for the ANC.
So while South Africans have bought into the new dawn mumbo jumbo and are reticent about accountability, people outside the country are watching in astonishment wondering what the consequences would be, if any. How does any investor put money on the table when the culture of impunity persists despite all the president’s undertakings about a cleanup?
As the diplomats who drafted the memo told the Sunday Times, CEOs in their countries cannot make the case to their boards about why money should be committed to SA now because their political situation is uncertain and there is only hope that prosecutions will eventually ensue.
The situation is so ridiculous that businesspeople wanting to survive in the corrupt system no longer know whose palms to grease because the ANC’s factional politics is so fluid. The five nations being aggressively courted for investment, therefore, tried to channel to the right people in government why doing business with SA was getting progressively difficult because of negative perceptions.
Even though this is common knowledge, they got shot down and accused of wanting “regime change”.
In truth, South Africans have become so accustomed to the abnormalities of our country and the era of impunity, that we expect others to put up with what we do. The result of this week’s spectacular diplomatic fallout is that they probably will not.