President Cyril Ramaphosa will not bow to growing political pressure to fire Minister of Public Enterprises Pravin Gordhan. 

The two met on Monday as part of a regular briefing exercise and Gordhan is said to continue to have Ramaphosa’s support. But what the president will have to grapple with at this weekend’s ANC national executive committee (NEC) meeting is Eskom’s reporting line. 

The ANC chairperson Gwede Mantashe wants Eskom placed under his Department of Mineral Resources and Energy. As the ANC chairperson, he enjoys far greater political authority than Gordhan.

Mantashe has the support of two powerful party figures: Treasurer-General Paul Mashatile and the Women’s League president Bathabile Dlamini who first floated the Eskom transfer at last week’s (January 11) party for the January 8 festivities in Kimberley in the Northern Cape. 

A so-called fightback faction in the ANC is in alliance with the EFF to launch a campaign to get Gordhan out. The first volleys were fired this week. The EFF has started a #Gordhanmustfall campaign which it will put into top gear at next month’s State of the Nation address on 13 February which coincides with the opening of Parliament. The EFF hopes to replicate the success of its #Paybackthemoney campaign which was a significant factor in pushing former President Jacob Zuma from office. 

But it is unlikely that Ramaphosa will bow to the pressure as he knows that this is a proxy battle to try to make him a one-term president. The ANC Elders put out on open letter to party members saying so this week. The renewal or reform faction of the ANC, led by Ramaphosa, has been weakened by the government’s inability to get a handle either on power cuts or on Eskom’s runaway debt. The move to Stage 6 load shedding in December, along with a struggling economy, has caused public fear and panic and allowed this camp to tap into the growing frustration of ordinary people. 

This has given the fightback faction a stick with which to beat Ramaphosa and it has identified Gordhan as the focus of its campaign.  

If it succeeds in dislodging Gordhan, then Ramaphosa becomes fair game.

The Ides of June

What the week’s political drama reveals is that the race to the party’s June national general council has started. While Ramaphosa had hoped to turn it into a “paper-based” and quite dry assessment of the party’s policies, it is now increasingly seen as a meeting of high drama where the fightback faction will fight several proxy wars. The NGC is meant to be a mid-term assessment of policy implementation but it has become a meeting which signals the relative strength or weakness of an ANC president.  Former president Thabo Mbeki’s hold on the ANC began to unravel at an NGC meeting in 2005 and he was ousted in 2008. 

These signals can be the campaign against Gordhan, the resuscitation of the resolution to nationalise the SA Reserve Bank and a push for faster land expropriation without compensation. The three topics, together with the tussle on who has political authority over Eskom, are likely to set the tone for the year. This week, Finance Minister Tito Mboweni got out of the blocks first when he ran a set of tweets to head off the debate on the nationalisation of the SARB which got him a fierce rebuke from ANC secretary-general Ace Magashule. Mboweni was warned to stay in his lane and not to speak publicly against party resolutions.  

Ramaphosa’s renewal camp is still believed to hold a slim majority in the ANC NEC, the provinces and the Cabinet, but the jury’s out on whether deputy president David Mabuza’s outburst that the president had been “misled” by Gordhan and Eskom’s board signified a shift in his hitherto neutral position in relation to the ANC’s warring factions.   

Either way, this weekend’s (January 17 and 18 2020) executive meeting is seen as critical in determining how the political year will go for Ramaphosa. A member of the party’s top six executive team said the party was committed to the government’s special paper on Eskom released by Gordhan late last year. The utility needed strategic partners (based on China’s model of keeping state-owned enterprises intact but using strategic private interests as minority shareholders) it needed to minimise job losses and ensure a just transition for workers. The member said the ANC knew it needed sober minds and steady thinkers.

SAA to take precedence over Eskom

It was announced this week that SAA is on the brink again as it battles declining cash flows and a weakened balance sheet. The airline puts numerous aeroplanes up for sale to pile some cash. It is in business rescue and while liquidation is not on the table (as it would mean the profitable Mango airline, as well as SAA Technical and Air Chefs, would also be liquidated) tough decisions will have to be made by the governing party at the NEC meeting this weekend.

The business rescue practitioners are not likely to countenance SAA continuing to rely on bailouts – it needs an emergency R2-billion from the Treasury but Mboweni is playing tough. “SAA is about to run out of cash and runway,” said an official. Eskom is still likely to come up at the NEC meeting as Mantashe’s supporters make the case for the utility to be moved into his department.

There is a larger debate due in government about how to manage the suite of state-owned companies as there are clear anomalies in the system: Prasa, for example, sits under the Department of Transport, while Transnet is part of the Department of Public Enterprises. In this context, an argument is likely to be made to move Eskom. Mantashe has sat on the Eskom board so he knows it well and as the minister in charge of mining, he can also play a role in bringing trade unions to the negotiating table as he was a former general secretary of the National Union of Mineworkers.

On the other hand, Eskom is in tussle because it is still the Ground Zero for State Capture, according to insiders.

Its procurement budget is still large and trade union members are said to have cornered coal and coal transport contracts for family members. The fixes on the Medupi and Khusile power stations are going to need big budgets and political patronage networks are lining up for these. These networks are believed to have their lines of support on the party’s NEC which explain why Eskom is subject to such a tussle. DM