The ANC was at a loss. The leadership did not know of [President Jacob] Zuma's plans beforehand and the president had merely informed Zweli Mkhize, the party's treasurer general, shortly before the announcement to dismiss Nene was made. 'We understand it is your right, even though we might not agree with it,' Mkhize told Zuma. The party issued a terse statement, saying it 'respects' the presidential prerogative to appoint a new minister. Jeff Radebe, briefing the media on Friday morning, said the executive had not been not informed and reiterated the president has the final say on ministerial appointments. Zuma was struggling to contain the fallout, and by Saturday the Presidency had issued four statements, including one saying Nene was to be seconded to the planned new BRICS Development Bank and another one denying allegations by the EFF that Myeni was Zuma's 'girlfriend'.
Some of the banks' research staff were still running around at the last hour trying to get the relevant data points and market reports to their principals before the meeting began.
Organised business was also in disarray. Business Leadership South Africa – who represented around 50 of the country's biggest corporates – didn't know how to respond or how to engage the governing party, an Ramaphosa and Mkhize were scrambling for solutions to the unfolding disaster. The private sector's response therefore was by no means a coordinated one, and informal conversations between businesspeople with links to the ANC and its networks proved to be the catalyst in setting up a crucial meeting between representatives of the ANC leadership and heavy hitters in the banking sector on Sunday 13 December 2015.
This high-level crisis meeting was held at auditors Ernst & Young's offices in Sandton in the afternoon, with the participants confirmed only by midday. Some of the banks' research staff were still running around at the last hour trying to get the relevant data points and market reports to their principals before the meeting began.
Mkhize, who was central in all conversations between the ANC's disaffected leadership and business over the course of the previous days, and Jeff Radebe, the ANC's head of policy and Minister in the Presidency, represented the ANC. The banks' delegation was headed by Dave Munro from Standard Bank and included, among others, Colin Coleman from Goldman Sachs and Maria Ramos from Absa. Also in attendance was Jabu Mabuza, president of Business Unity South Africa, and Motsepe. Nine banking executives attended the meeting.
Munro opened discussions by explaining the toxic mix of repercussions should the markets open the following day with Van Rooyen still at the helm of the economy. Mkhize and Radebe were presented with a survey of top international asset managers about their views on the country, research into the market impact of Van Rooyen's continued tenure at Treasury and the impact of the new appointment on the macro- and microeconomic level. The arguments were also framed in such a way so as to speak to the ANC's policy of alleviating the effect of the so-called 'triple challenges' of poverty, unemployment and inequality. The bankers had to speak ANC language in order to get their message across. Munro explained to Mkhize and Radebe that what set South Africa apart in the eyes of international investors was the strength of its institutions, specifically the steadfastness of the Treasury in determining fiscal policy and the SARB in managing monetary policy. It's what made South Africa stand out from its peers in the developing world, like Brazil and Turkey, and what made it a premium investment destination.
They were also warned by the corporates that should the country continue on its current path, it would lock in low GDP growth and struggle to close the yawning wealth gap. The arguments hit home. The meeting concluded at around 5 pm with a consensus: the country faced unmitigated disaster if an immediate course of correction was not effected.
Mkhize and Radebe relayed the outcome of the meeting to Ramaphosa, who earlier had threatened a Cabinet walkout if changes were not made. The deputy president led a delegation of ANC leaders to see Zuma at his official residence, where he gave an account of the afternoon's meeting and explained that the country could not afford the continued upheavals. There was some debate on who Van Rooyen's replacement should be, with Kganyago also being considered to take over from him. In the end, it was decided that although the SARB governor would be a shoo-in in a normal course of events, Zuma's overreach demanded a commensurate response and that Gordhan had the trust of international investors, the markets and rating agencies. Zuma had gone too far when he appointed the unknown and pliable backbencher Van Rooyen; the corrective response needed to be equally drastic. By 6.30 pm that evening, Gordhan had been reappointed as finance minister. Van Rooyen who was mocked on social media as 'Weekend Special', the title of Brenda Fassie's famous song – was no more. He was finance minister for four days.
It was amazing. You could see PG's prowess, he was out of the business for 18 months but he's an old hand. The currency didn't recover as we had hoped, and he was worried about it, but we decided to ensure that things were fixed by FebruaryLungisa Fuzile, former director general in the Treasury.
At 7 pm [director general Lungisa] Fuzile received a call from Lakela Kaunda, Zuma's chief of staff, who handed him over to the president: 'Look, there's going to be another change at Treasury, this one hasn't worked, you are getting PG back.' Shortly afterwards he received another call, this time from his newest minister, saying it was time to get back to work. They immediately started preparing for the next day, and drafted a statement, which was circulated among senior staff.
By 11 am on Monday 14 December 2015, Gordhan was back in his old office at 40 Church Square, finalising the statement before addressing a lunchtime press conference at the GCIS building in downtown Pretoria. Flanked by his A-team of Jonas, Fuzile and Kganyago, a confident Gordhan set out to re-establish Treasury's authority. He called the appointment of Van Rooyen 'a miscalculation' and said his return to the portfolio indicated that government was responsive to criticism and the reaction of the investor community. The Treasury would stay the course of fiscal consolidation and discipline, the expenditure ceiling remained 'sacrosanct' and state-owned enterprises would be whipped into line, he said. He slammed Myeni in a thinly veiled attack, saying SOEs aren't 'personal toys', adding that the nuclear acquisition programme needed to be affordable. 'There are some who forget, that think state resources are there to enrich them,' Gordhan said.
Jonas and Fuzile accompanied Gordhan back to the Treasury, where the minister had a teleconference with investors, who wanted to know if fiscal policies would change and if demands around student fees were going to 'bust the budget'. But Gordhan handled the call with aplomb. 'It was amazing. You could see PG's prowess, he was out of the business for 18 months but he's an old hand. The currency didn't recover as we had hoped, and he was worried about it, but we decided to ensure that things were fixed by February,' said Fuzile.
Book reference: Enemy of the People, by Adriaan Basson & Pieter du Toit, published by Jonathan Ball Publishers, RRP is R260.00
Text reference: © Text by Adriaan Basson & Pieter du Toit, 2017.