The row between chief justice Raymond Zondo and parliament has been something to behold. In some sense it is the classic SA playbook: person who might well know a thing or two makes a comment about a situation. Other side takes offence and tells said person to stay in lane, or patronises and says they don’t really understand the full picture. A meeting is called, which both sides always say was “constructive” (because the meeting is more important than the content or meeting of minds) and they all continue on their merry way.
We saw this with former Eskom CEO André de Ruyter; with business vs government; business vs civil society; and NGOs vs the state.
The issue with Zondo is rather more dramatic in that we are talking about pinnacle institutions. Equally, the stakes are higher — we are talking about avoiding State Capture 2.0.
The parliamentary line of attack is odd. Ignoring for a minute whether they actually undertook any training or what that training was, parliament is essentially saying it is an empty vessel and its members aren’t really responsible for anything that goes on outside its halls. Proper institutions have a culture and a patter, a way of doing things and a momentum. Parliament seems to be suggesting that it has none of these — which might well be true.
Parliament didn’t appear out of nowhere with the transition to democracy and though it now operates (rightly) via majority rule, the majority party sees itself as more important than anything else. And that might be a root cause of SA’s problems, which Zondo alluded to. Parliament’s stance thus far suggests that nothing will change, and that is a deep concern.
Investors, business and markets are asking serious questions about the current administration in cleaning up state capture and, in particular, the ability to guard against a repeat.
It is a strangely SA affliction to call out those who highlight risks. It comes from the unfortunate place of having designed things for a Mandela administration rather than a Zuma one. Institutional strengthening, shifts to the culture and professionalisation of the public sector, and the role of parliament must all be designed against an assumption that State Capture 2.0 is possible.
This is all the more important with messy internal ANC issues, and the likelihood of messy coalitions after next year’s general election. SA businesses and investors are thinking about the risks and so by extension the quality of institutions such as parliament to contain any mess that might emerge after the elections. Even if our baseline is that the status quo continues with the ANC on 47% of support and one other party in coalition with it, the downside risks are alarming enough to require serious thought.
Coalition government at a national level has the risk of being messy and combative, in which case parliament should, but probably won’t, have a key role. The current desire to find codified (legislative or other) solutions to the coalition issue and mess that has emerged in Gauteng and could infect the national level seems to entirely miss the point. These are political issues that no codification can ever solve when sitting in a room as parties after elections.
The point of an institutionally secure framework is that it constrains the landscape on which the madness can occur and makes such codification unnecessary.
The lack of any sense of succession in the ANC isn’t helping the situation. While we can talk in probabilities of who takes over, there appears to be no sense of momentum and continuity in the longer term. This lack of urgency by many actors is alarming but not surprising. It has been 18 months since Zondo reports started to emerge. The weight of establishing accountability, of prosecutions and of institutional change hasn’t occurred fast enough to gain a self-fulfilling momentum that itself could be seen as a deterrence to future state capture.
The current foreign policy dramas I wrote about two weeks ago show how problems and irrational decisions can fester far longer than one might regard as reasonable. It is a far cry from where we thought we would be if we cast our minds back to the Ramaphoria five years ago.
Markets have a habit of vastly overplaying issues on the positive and negative side — consider the recent hysteria of an imminent national blackout or the overhyped risk of sovereign-level sanctions. A positive outcome of solid institutions, the rule of law is to constrain more extreme market musings. Unfortunately this isn’t the case sufficiently in SA (and is perhaps a missing angle on the Financial Action Taskforce issues that haven’t gone away and are very much about institutions).
This is not to say the baseline is particularly negative or to deny that there are underling sensible forces in the political economy and the ANC that constrain excesses (though often at one minute to midnight). Instead it is about a “flappy end” problem — the outlook appears poorly anchored with fat tails and deep uncertainty. That has negative consequences for investment and growth.
The situation is unlikely to change before next year’s elections and so we must all strap in — both for what dramas the political space might throw at us, and for moments of markets “throwing their toys out of the pram”.
• Peter Attard Montalto leads on political economy, markets and the just energy transition at Krutham.
This article first appeared in Business Day.