As I type this, the South African political media is in a froth over the news that Finance Minister Pravin Gordhan and his deputy Mcebisi Jonas were suddenly ordered by President Jacob Zuma to cancel a planned business trip to the United States, and to return home immediately.
If you know any swear words, write them all down. You're going to need them. Breaking News coming....— Ranjeni Munusamy (@RanjeniM) March 27, 2017
The Daily Maverick's Ranjeni Munusamy broke the news first, and the story at the time only contained those details. The finance minister was to return home immediately. As other news outlets leapt on to the story, not much more information was forthcoming.
This is what we in the business call an information vacuum. Into it must inevitably pour feverish speculation and guesswork. In the meantime, the rand took a hiding, moving from a period low of R12,35 to the US dollar to R12,56 at 12:56 PM. The economic impact will be significant.
None of the breaking news panic is unfounded, of course. Not since 9/12, or Nenegate. In December 2015, Zuma caused an economic mess when he suddenly removed Nhlanhla Nene as finance minister. The reasons he gave have since turned out to be complete bunkum, but at the time it was the rout on the rand (and the flurry of concerned phone calls from ... gosh, everybody) that forced a rethink, and the quick appointment of Gordhan. The currency collapse was terrible news, not just for the Johannesburg Stock Exchange, but for pension savings and investments. The Public Investment Corporation lost over R100 billion.
Then there's been the subsequent war of attrition waged on Gordhan by the Hawks...
Needless to say, Gordhan is now the most watched man in South Africa. The frequency of his sneezes is the subject of microscopic analysis and conjecture. Sure, he's the finance minister and that comes with the territory. But the sense that he's living on borrowed time and any wrong move will be the excuse used to eject him once again from the finance ministry is not unearned.
So when the presidency's first press statement (many, many more are sure to follow) on the matter was released, it was disappointing to say the least. This is all it said: "President Jacob Zuma has instructed the Minister of Finance, Mr Pravin Gordhan and Deputy Minister Mcebisi Jonas to cancel the international investment promotion roadshow to the United Kingdom and the United States and return to South Africa immediately."
Note the complete absence of an explanation for the "recall", if we may borrow a term from the perilous end of Thabo Mbeki...
An explanation of any kind would have been welcome. More so if the news is indeed going to be bad for market and currency stabilisation. A president who take his job as steward of the economy seriously anticipates market reactions to various pronouncements, and preempts the negative ones by putting out as much information as possible into the public domain.
This is not to blame the presidency spokesperson, Bongani Ngqulunga. He may have told us as much as he was authorised to, at the time. Perhaps it is his principal who sees strategic value in the fog of speculation and uncertainty that he created on Monday morning. But away from the palace intrigue, back here in the real world, an explanation was very necessary. Any explanation. Did Gordhan leave the kettle on? Did he forget it was his turn to do the dishes? Is the recall to do with the Standard Bank (and other banks) vs Oakbay Investments court case, due to be heard on Tuesday and Wednesday? Is the president about to sack him? We deserve to know.
#Gordhan UDM Chief Whip, Nqabayomzi Kwankwa: Presidency's request for Treasury to return from the investor road-show wasn't well thought out— POWER987News (@POWER987News) March 27, 2017
When Mbeki fired his deputy defence minister, Nozizwe Madlala-Routledge, he wrote a legendary letter, which was released to the public. He stated clearly his perspective, and gave reasons for his decision.
The letter read:
"Dear Deputy Minister,
"This letter serves to inform you that, acting in terms of the provisions of clause 93 of the constitution of the Republic of South Africa, I have decided to relieve you of your duties as deputy minister of health with effect from today.
"All of us who serve our people through the national government took an oath or made a solemn affirmation to respect and uphold the constitution. This same constitution calls upon us to, among other things, work collectively to develop and implement national policies.
"I have, during the period you served as deputy minister of defence, consistently drawn your attention to the concerns raised by your colleagues about your inability to work as part of a collective, as the constitution enjoins us to.
"For the same reason, I have also discussed this matter with you as deputy minister of health.
"You travelled to Madrid despite the fact that I had declined your request to undertake this trip. It is clear to me that you have no intention to abide by the constitutional prescriptions that bind all of us. For this reason I suggested to you that you should resign.
"It is clear that you do not accept my advice. This leaves me no choice but to relieve you of your duties.
"I thank you for your participation in government over the past years.
This is what acting as per your duties looks like.
An explanation for Gordhan's cancelled trip was very necessary. Whatever it will turn out to be, it was better to inform the public at once. The predictable frenzy could have been avoided. It should have been avoided.Suggest a correction