October 24, 2016 / 9:41 AM / 3 years ago

Business plea for Gordhan echoes rifts in South Africa's ANC

JOHANNESBURG (Reuters) - At least 80 heads of top South African firms including Anglo American, Barclays Africa Group and Naspers want fraud charges against Finance Minister Pravin Gordhan to be dropped.

South African finance minister Pravin Gordhan poses for a photograph in Pretoria, after speaking via video link to a Thomson Reuters investment conference in Cape Town South Africa, October 14,2016. REUTERS/Siphiwe Sibeko

The top executives of mostly-listed firms in Africa’s most industrialised country - ranging from mining, media, retail and banking - said in a newspaper advertisement on Sunday that political wrangling was damaging an already stalling economy at a time the country faced a sovereign credit downgrade.

The calls by corporate South Africa echo those in the political realm, after a senior official in the ruling African National Congress (ANC) called for the party’s leadership to quit over the alleged political persecution of Gordhan.

The rifts are the latest sign of rising political tension as the ANC grapples with waning support since losing control of three key cities in the August municipal elections.

“We stand as one for the rule of law and against the decision to prosecute the Minister of Finance on charges that are, according to the preponderance of expert legal opinion, without factual or legal foundation,” the business leaders declared in their statement.

The charges say Gordhan, while running the tax agency, fraudulently approved early retirement for a deputy commissioner and re-hired him as a consultant, costing the tax agency around 1.1 million rand ($79,000).

Gordhan, who is due in court on Nov. 2, has dismissed these as politically motivated.

Zuma has said he is not in conflict with Gordhan and the country’s top prosecutor has denied any political motivation. Gordhan said last week his relations with Zuma were very good.


On the same day as the business leaders’ ad hit the newsstands, Jackson Mthembu, the ANC chief whip in parliament, urged Zuma to lead senior party officials in quitting their posts, saying fraud charges against Gordhan reflected an abuse of power to settle internal political scores.

ANC spokesman Zizi Kodwa ruled out any mass resignation, telling the News24 media service that “it gives an impression that the organization is divided”.

Political analysts say the ANC’s ranks are already divided. Several senior leaders, including Deputy President Cyril Ramaphosa, have publicly backed Gordhan.

Political analyst Eusebius McKaiser wrote that Mthembu spoke for a critical mass of leaders “who are finally, if rather belatedly, getting the point of the electoral backlash.”

Scandals have haunted Zuma for much of his presidency.

The Constitutional Court ruled in March that he failed to respect an order by the anti-graft watchdog to repay some of the 250 million rand ($18 million) in state funds used to upgrade his private home. He has since repaid the money used on non-security features.

His increasingly controversial leadership could hurt the ANC further in the 2019 national elections, analysts say.

But Zuma still enjoys strong support within the ANC and is likely to stay on at its helm until a congress to chose new leaders next year, analysts say.

“There is no denying that the ANC is slipping deeper into crisis,” NKC African Economics political analyst Gary van Staden said. “While the Zuma faction continues to hold sway, it must be aware that there is no reversing the trend within and that its time may be running out.”

Additional reporting by Mfuneko Toyana; Editing by James Macharia and Tom Heneghan

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