Gordhan has a pit of vipers to disentangle
Back in the Public Enterprises seat, he'll have to watch his back as he turns around SA's abysmal state entities
The most important issue for Pravin Gordhan as he steps into his new office as minister of Public Enterprises will be to curb massive wastage and over-expenditure at state owned entities.
As a former Finance minister, he would have been aware of the stumbling blocks Treasury’s office of the chief procurement officer has had with SOEs not playing ball.
Top of Gordhan’s list is likely to be Eskom, the financial problems of which have been described by the national Treasury as the single biggest risk to the South African economy and public finances.
Memories are still fresh of former Treasury’chief procurement office Kenneth Brown’s public war of words with then Eskom CEO Brian Molefe as attempts to scrutinise Tegeta contracts were thwarted, while Brown’s teams received the same treatment at other captured organisations such as Transnet when it attempted to look into Gupta contracts there.
Another hot potato Gordhan, 68, will have to express himself on is whether government intends to sell off whole or part of some of its non-performing state assets. In the recent past the state has been in discussions with interested parties regarding the sale of a part of Denel and rumours regarding Transnet, SAA and Eskom also abound.Gordhan has had a roller-coaster ride in government, and this week marks the fourth time he has been appointed as a minister. He was Finance minister from 2009 to 2014, when he was appointed minister of Co-operative Government and Traditional Affairs. In 2015 then president Jacob Zuma was forced to put him back into the Finance hot seat after his initial choice for the position - Des van Rooyen - met with a huge public backlash. Gordhan spent just over a year in the job until he was axed by Zuma in March last year.
Speculators point to this axing as the beginning of the end for Zuma.
That reshuffle, which saw Malusi Gigaba step into his shoes at Finance, was received badly by South Africans, investors and ratings agencies, but also saw an increase in murmurs within the ANC about Zuma’s recklessness.
The axe fell on Gordhan, and his deputy Mcebisi Jonas, as they were conducting road shows, alongside business, to allay investor fears when they were summoned back home to be ousted in a midnight reshuffle which immediately sent the rand tumbling from R12.31 to R13.41.
It divided the ANC and distanced the party from its alliance partners, while galvanising fed-up South Africans from all walks of life against Zuma’s administration.
SACP deputy general secretary Solly Mapaila revealed at the time that Zuma, in an attempt to get the support of alliance partners ahead of the reshuffle, lied and presented a sham intelligence report that Gordhan was working with outside interests as a reason to oust him.
Mapaila was one the first allies to publicly question how Zuma utilised his presidential prerogative to hire and fire ministers. It was also one of the few times his then deputy Cyril Ramaphosa spoke out against his boss.
Zuma’s handling of the matter, both politically and publicly, betrayed a deep annoyance with Gordhan for his international work as well as his tough stance on reckless and corrupt-ridden procurement by government departments.Gordhan and Zuma had stared each other down following Gordhan’s refusal to grant a critical government guarantee in 2015 required for SAA to finalise its financials.
Another annoyance was the national Treasury’s stance against corruption and irregular and wasteful expenditure , which was proving to be a thorn in the side of some in Zuma’s cabinet as well as Zuma’s friends, the Gupta family.
The stand-off saw the Guptas mount a concerted media campaign, run by UK-based PR Bell Pottinger, which painted Gordhan as a lackey of white monopoly capital.
At stake was billions in dodgy deals at Eskom and Transnet that were either being blocked or investigated.
These attacks coincided with other, more blatant attacks from Gordhan’s own cabinet colleagues, who were frustrated by the Treasury’s toughness, among them then Water Affairs and Social Development ministers Nomvula Mokonyane and Bathabile Dlamini.
Gordhan’s refusal to intervene in the Gupta family’s impasse with South Africa’s commercial banks who had shut their bank accounts was another irritation to Zuma.
There is little doubt that turning around South Africa’s abysmal state entities will be a massive challenge for Gordhan.
Many of his critics still hold positions of power in government, and he will have to watch his back as he takes on one of government's toughest portfolios.