Pravin Gordhan faces charges of fraud and has been summoned to the Pretoria Regional Court on November 2. The charges appear to be spurious. They concern Gordhan’s approval of the early retirement of a government employee and his subsequent re-employment under contract. The claim is that the amount of money involved is just over ZAR 1.1 million (approximately $76,000). Early retirement followed by re-engagement on contract is commonplace in many governments, including that of South Africa.
The seemingly trumped up charges should be seen in the context of an ongoing struggle within the governing African National Congress in the aftermath of the August 2016 local government elections and the reverses and scandals that plague the Zuma administration. Gordhan and the Treasury are associated with “reformers” who want to repair the party, restore its eroded grass roots support, and manage the economy to generate badly needed economic growth. Zuma, parts of the security services, various patronage/clientage networks, and (broadly speaking) the traditional party machinery seek to restore the political power of the president and break the intra-party opposition that is associated with Gordhan and many other senior party figures, including Deputy President Cyril Ramaphosa.
Zuma’s allies are likely to call on Gordhan to step down, pending his trial. But, Gordhan is unlikely to do so, not least because of his considerable support within the party. Gordhan also enjoys the respect and support of the domestic and international financial community. In attacking Gordhan, Zuma and his allies are playing with international financial fire: in the day since the fraud charge was levied on Gordhan, the rand has fallen nearly four percent to 14.28 to the U.S. dollar. Efforts to remove Gordhan also raise the specter that the international financial rating agencies will down grade South African bond to ‘junk’ status. Hence, it is by no means certain that Gordhan will actually be brought to trial, and if he is, that he will be convicted.