EXTRACT: Enemy of the People - 'The axe has fallen'
It had been a long and stressful day. The Treasury director general, Lungisa Fuzile, was driving through Pretoria in the early evening of Wednesday 9 December 2015. Earlier that day, in the final Cabinet meeting of the year, at the Presidential Guest House, the Treasury team had presented details of the 2016/17 national budget. It was a difficult meeting.
University students were demanding that fees be scrapped, while the medium-term budget policy statement, the so-called mini-budget, delivered three months before, had made it clear that fees would at the very least need to increase by 6% the following year. Zuma, however, announced unilaterally that fees would not rise in the coming academic year, leaving Treasury to figure out how to pay for the shortfall.
During Treasury's presentation to ministers and senior officials, Finance Minister Nhlanhla Nene laid out the options to finance the president's promise to students: government either shifts money from other departments and development programmes to the Department of Higher Education, or it will have to borrow.
It was vital, Nene argued, that government stuck to the expenditure framework and ceiling set during the mini-budget so as to maintain the country's debt rating. Luckily for the fiscus, Nene and Fuzile – a decision was taken against borrowing and it was agreed that money would be found within the existing budgetary framework. But Fuzile, along with colleagues Michael Sachs (head of the Treasury's Budget Office) and Dondo Mogajane (head of Public Finance), returned to their headquarters at 40 Church Square worried.
Ever since Trevor Manuel's tenure as finance minister, the national expenditure allocations – how much money each department would be getting – has always been finalised before Christmas. Fuzile, Sachs and Mogajane talked about the implications before agreeing that they would come back straight after Christmas to start looking for the money. It was a precarious situation to be in and unknown territory for these experienced Treasury professionals.
Fuzile, director general since May 2011, got a text message from Nene while he was weaving his way through the capital's traffic. It simply said: 'The axe has fallen.' Nene had been fired – in the middle of a budgeting crisis.
Fuzile knew there was a large degree of unhappiness with his minister, who was comfortable telling his colleagues no when they asked for money. He was also aware of the sniping attacks on him during Cabinet meetings, often led by the president, when the minister preached austerity and fiscal responsibility. 'It isn't Treasury's place to tell us there isn't money, Treasury should simply go and find it,' one minister had said during a previous heated Cabinet exchange.
Fuzile phoned Nene, who confirmed he had been removed, and drove to Monument Park, the suburb where the ministerial residence is. On his way there, Mogajane called Fuzile: the Presidency had called earlier, looking for Nene's phone number. His colleague wanted to know what it was about. Fuzile's phone rang again. A member of the ANC's NEC said: 'Have you seen the news? I suppose you're going to get a Gupta minister now.' Fuzile was dumbstruck and told the NEC member so.
'Don't you know the modus operandi? Look at what happened at the Department of Mineral Resources. The Guptas decide who they want as minister. They then send along advisors,' he said. Fuzile didn't know what to make of it.
Nene had left the Cabinet meeting at Bryntirion just after 5pm to go to the gym, but on his way there he got a message from the president's office: could he come to the Union Buildings, the head of state wants to see him. His driver turned the car around. Arriving at the presidential suite, he saw staff typing furiously on their computers and spotted just enough to confirm his worst fears: the curriculum vitae of Minister David Des van Rooyen.
'The ANC has decided to deploy you to the Africa division of the BRICS Development Bank,' Zuma told Nene, before thanking him for his service and sending him on his way. Fuzile arrived at Nene's home, offered his condolences and shared some thoughts before leaving. He sent a text message to his new political principal, welcoming him to the Treasury and advising the new minister to issue a full statement early in the morning. He received no reply. He didn't tell Nene about the worrying call from the ANC NEC member, but did remark on the fact that a few days before a report had appeared in Business Day speculating that Nene might be redeployed to 'an international finance institution, like the planned Brics Development Bank'. It was all very curious.
Just after 8pm, the Presidency issued a statement saying Zuma had decided to replace Nene with an unknown backbencher, Des van Rooyen, ahead of Nene's redeployment 'to another strategic position'.
At the exact same time as the statement was released, Zuma was delivering a speech at a gathering of business leaders in Johannesburg, attended by ANC benefactor and mining magnate Patrice Motsepe, amongst others.
Zuma told these captains of industry: 'I think there is a bigger struggle to fight, to liberate ourselves economically. Even that definition I'm talking about ... I rebelled against it, that what determines the value of a commodity is the law of supply and demand. No! I define it differently, the value of a commodity. It is the necessary labour time taken in the production of a commodity, that is what determines the value.'
The rand tanked, losing 80 cents against the dollar and threatening to breach R16. The news exploded on social media and reporters were scurrying around: who the hell is Des van Rooyen? Where's he from? If Nene has done so well and is so well respected, why remove him? When the next day had dawned, the South African economy was already being buffeted by the worst storms since the unmitigated disaster that was PW Botha's infamous 'Rubicon speech' of 1985. And that's saying something.
* This extract was taken from Enemy of the People, how Jacob Zuma stole South Africa and how the people fought back, written by Adriaan Basson and Pieter du Toit and published by Jonathan Ball Publishers.
** The extract has been modified after publication.