Jacob Zuma and the Theft of South Africa

Protesters outside the Gupta family compound in Johannesburg in April. Credit Joao Silva/The New York Times
Protesters outside the Gupta family compound in Johannesburg in April. Credit Joao Silva/The New York Times

South Africa’s ruling African National Congress will meet on Dec. 16 to elect a new party president. It will do so in the throes of a debilitating crisis. A decade of President Jacob Zuma’s leadership has seen Africa’s oldest liberation movement become a caricature of corruption and factionalism.

The A.N.C.’s electoral support is in steep decline. In the 2016 municipal elections it lost control of the capital city Pretoria, as well as South Africa’s economic powerhouse, Johannesburg. Its historical alliance with the South African Communist Party is all but dead. The Congress of South African Trade Unions, its other partner, is in deep crisis. It is unlikely that the A.N.C. will win the 2019 national and provincial elections outright.

At the center of the party’s troubles is a business family, the Guptas. Led by three brothers — Ajay Gupta, Atul Gupta and Rajesh Gupta — the family moved to South Africa in 1993 from Saharanpur, a small, impoverished town in the northern Indian state of Uttar Pradesh.

When the Guptas arrived in South Africa, they astutely acquired citizenship as naturalized “blacks” to benefit from the country’s black economic empowerment laws. The Guptas, who started their South African life with a computer business, befriended and employed President Zuma’s son, Duduzane Zuma, and eventually appointed him a director of one of their companies.

In this way they positioned their various enterprises as black businesses, waging a relentless battle against “white monopoly capital.” They even started a newspaper and a television channel to advance the cause. It earned them generous support from President Zuma, who has been ruling South Africa since 2009. The Guptas rose to be among the wealthiest people in South Africa.

Under the Zuma administration, the Guptas have become part of a shadow state, where political power is often exercised from their private residence in Johannesburg rather than through constitutional bodies, the South African cabinet or the A.N.C. itself. As their influence has grown, they have treated the country as their private estate. They used the country’s main military airport to land guests for a family wedding. The wedding itself was largely paid for by the Free State provincial government.

The auditing firm KPMG has recently come under fire for failing to flag this transaction. Other international corporations are similarly complicit in Gupta-engineered corruption. McKinsey paid a Gupta-linked company, Trillian, millions of dollars to secure lucrative contracts with Eskom, the state power utility. The Guptas helped broker a locomotive deal with a Chinese manufacturer, earning 5.6 billion rand (about $410 million) in kickbacks from the 30 billion rand (about $2.19 billion) deal.

Meanwhile, President Zuma has purged key state institutions of honest and professional people to appoint acolytes. At the South African Revenue Service, the country’s tax authority, investigations into politically connected individuals evading taxes have been shut down.

Jacques Pauw, a celebrated anti-apartheid journalist, recently exposed how President Zuma himself is a delinquent taxpayer. In the specialized police force, the Hawks, criminal investigations are delayed or simply do not happen. The prosecutions authority has also been captured. Even if cases are investigated, they do not find their way to court.

President Zuma had more than 700 charges of fraud and corruption pending against him, but a top prosecutor withdrew the charges in 2009. Earlier this year, the High Court in Pretoria ruled that the decision not to charge him was irrational. In October, the Supreme Court of South Africa upheld the High Court decision.

All this takes place in the context of weak economic growth and rising poverty and inequality in the country. South Africa has still not recovered from the global economic crisis that began in 2008. Economic growth has been broadly in decline for the past five years. Gross domestic product is sluggish at under 1 percent — well below the population growth rate of 1.6 percent.

Unemployment is nearing a shocking 28 percent. If discouraged work seekers are included, 36.6 percent of South Africans are unemployed. The youth unemployment rate hit 55.9 percent in the second quarter of 2017. Since 2013, more than half of eligible young workers have not been able to find jobs.

These cruel figures map onto historical patterns of race and gender inequality. Six in 10 South Africans live on less than $3,090 per year, but 2.2 percent of the population has an annual income exceeding $26,000. Poverty remains largely a black experience. Eighty percent of the population is categorized as poor, but 90 percent of black South Africans fall into this category.

For the A.N.C., which has for decades presented itself as a unifying force for democratic change and development, the country’s economic stagnation is an existential threat. The reasons for the country’s economic decline are varied and complex. But policy complexity doesn’t play well in politics.

Through the work of a London-based public relations firm, Bell Pottinger, in close collaboration with the Gupta family, the analysis that stuck, especially in A.N.C. circles, was that “white monopoly capital” was the problem. That is, growing racial inequality was the result of the stranglehold that whites exercised over the economy. The argument resonated because it is true that patterns of ownership and control in the economy are racially skewed. But it was also a sharp departure from the A.N.C.’s historical commitment to non-racialism.

President Zuma has served his two terms as the president of the A.N.C., and his tenure as the president of South Africa ends in 2019. The next president of the A.N.C. will be the president of the country if the party wins the national elections. The front-runners in the race for the A.N.C. president are Cyril Ramaphosa, the former unionist turned businessman and Nkosazana Dlamini-Zuma, the former head of the African Union and President Zuma’s ex-wife.

Apart from personalities, the choice ultimately comes down to whether voting delegates believe that the country’s direction under President Zuma represents the best future for South Africa.

If they do not, there is at least a chance of a democratic opening in the A.N.C. Maybe then South Africans can begin to look for solutions to their daunting problems that are not based on crude nationalism and racial essentialism.

Ivor Chipkin is the executive director of the Public Affairs Research Institute at the University of the Witwatersrand, Johannesburg.

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