South Africa: Nkandla, Guptas and splits in the ruling class - ANC in its deepest crisis ever

The recent Constitutional Court judgment against President Jacob Zuma is only the latest in a series of rapid-fire events which have shaken South African society fundamentally. From the Marikana massacre in 2012, to the latest revelations, society has been staggering from one crisis to another. The turnover of these events is astonishing. New shocks crop up almost on a weekly basis, and old controversies resurface periodically only to assume new convulsive forms. In the final analysis, this shows that, on a capitalist basis, none of the fundamental problems of society can be solved.

Nkandla

In the latest shock, the Constitutional Court, in a scathing judgment, found that Zuma has violated the constitution by refusing to implement the findings of the Public Protector and repay public money used at his private homestead in Nkandla. In its judgment the court ordered that the Ministry of Finance (ironically under control of his nemesis, Pravin Gordhan) should determine the amount of money Zuma should repay within 60 days of the judgment, after which Zuma has 45 days to settle the amount.

The Nkandla scandal has been raging for the last 7 years. It is the most extreme example of the extent to which corruption, self-enrichment, and looting of state resources has spread to the highest echelons of the ANC and the state. The real scandal of Nkandla, beside the legal and technical aspects of it, is the fact that R246 million was spent on the palatial residence of one man and his family, in a country where 8 million people are battling to find meaningful employment and where 13 million people go to bed hungry every day.

The fact that the entire ANC parliamentary caucus has for years covered up the scandal shows that the cancer of corruption is not limited to a few bad apples. If this were the case, it would have been relatively easy for the ANC to remove the tumour of corruption before it infected the entire organism. But corruption is endemic to capitalism. In its various forms, legal and illegal, it is the mechanism used by the capitalists—from the Oppenheimers and the Ruperts to the Guptas and the tenderpreneurs—to “grease” the mechanisms of the system and to chain the leaders of the ANC to themselves and to it.

Firefighters showing off the utility of hte "fire pool" of Zuma's R246 million residence.The small bourgeois parties in parliament have been wholly incompetent in opposing this scandal. This was not because they were small, but because they were bourgeois, and are therefore tied to the system. For years the ANC could afford to steamroll the opposition in parliament and quash any report on the matter, or to simply to pass its own illegal reports and resolutions.

But a fundamental turning point came when the Economic Freedom Fighters, only six months in existence at the time, entered parliament after the 2014 national elections. Through their #PayBackTheMoney campaign they turned the entire situation around. With only 25 MPs out of a total of 400, the EFF turned parliament on its head. Their militancy and radical left-wing stance paralysed parliament and exposed it for the fraud that it is. This gave a partial outlet to the enormous anger which exists against the ruling establishment amongst the workers, the poor, and the youth. The EFF gave Zuma, the Speaker, and the ANC MPs a torrid time by demanding that Zuma should comply with the Public Protector’s report. After cabinet ministers and the ANC MPs in parliament had been thoroughly discredited, the EFF took the case to the Constitutional Court.

The outcome of the court case has greatly boosted the authority and standing of the EFF in society. In the last two years they have made an impact like no other opposition party has done since the fall of apartheid. But a new era has now opened for the party which will probably decide its future. As we have explained elsewhere, they will be placed under enormous pressure by the ruling class to moderate their message and to tame the mass anger which is brewing in society. The reason for this is not so much because of Julius Malema and the leadership of the EFF, but for fear of the mass movement they have built up.

In the wake of the Concourt ruling, the bourgeois opposition has put forward the need for a united opposition against the ANC. They have proposed all kinds of parliamentary processes to deal with the fallout of the judgment. The EFF has responded by stressing that all parliamentary processes would have to be exhausted. At the same time, they have put off the idea of mass protest action to a distant future. This will fit the agenda of the bourgeois opposition parties. The last thing they want is for mass action to erupt in this politically charged atmosphere. Their aim is to channel the mass outrage into the courts or through the obtuse workings of bourgeois parliamentarism. But for the masses, a solution can only be reached by combining legalistic work with mass action in the streets.

Damned if they do, damned if they don’t

This judgment is a devastating blow to Zuma and to the governing African National Congress. It comes on top of all the myriad scandals besetting the party for years. At the center of all of these is Jacob Zuma, whose presidency has been mired by one scandal after another. The judgment of the court was received with almost universal calls for his resignation. The ANC has been inundated. Ordinary ANC members have expressed a deep sense of embarrassment and shame.

Calls for Zuma’s resignation have come from some of the liberation movement’s most authoritative voices. Denis Goldberg, one of only three survivors of the 1961–63 Rivonia trial, along with Nelson Mandela, Walter Sisulu, and others, called on Zuma to stand down, calling him a failed leader. “I felt betrayed. When the issue was raised in Parliament, he said ‘I didn’t ask for it, why should I pay?’ Hundreds of thousands were spent on legal fees. I’m happy to see that others are speaking out about this as well. And it does not surprise me one bit,” Goldberg said.

Another Rivonia trialist, and one of the most revered anti-apartheid activists, Ahmed Kathrada, who spent 26 years in prison together with Nelson Mandela, wrote a letter to Zuma, asking him to resign. “I am not a political analyst, but I am now driven to ask: Dear Comrade President, don’t you think your continued stay as President will only serve to deepen the crisis of confidence in the government of the country?

“And bluntly, if not arrogantly; in the face of such persistently widespread criticism, condemnation and demand, is it asking too much to express the hope that you will choose the correct way that is gaining momentum, to consider stepping down?” he wrote.

The voices of people like Kathrada and Goldberg undoubtedly carry a lot of weight. Their moral authority and history of selfless struggle are unquestioned. But this is not a moral question. Nor is it merely about Zuma as an individual. It is about an entire network of people who maintain themselves by attaching themselves, like leeches, to his presidency.

On Zuma’s presidency lies the fate of an entire layer of sycophants. Zuma is the first representative of patronage and cronyism, and its staunchest defender. For him and these sycophants, the office of the presidency and access to high political office are conduits for short-term accumulation. It is therefore not a matter of morality or ethics, but of material interests.

If he resigns, or is recalled by the NEC of the ANC, the entire network would unravel. A whole layer of leading ANC members would be caught up in the fallout. The damage that this would do to the ANC could be incalculable. It could immediately unleash an internal civil war which could consume the whole party. As Gwede Mantashe, the Secretary-General, pointed out, recalling Zuma “will tear the ANC apart.” The problem for Mantashe and the ANC is that the outcome will be the same by keeping him in office, though the effect will be much more protracted. Therefore, the ANC is now stuck in a protracted political quagmire from which it cannot escape.

Big capital and the looming implosion of the Guptas

The latest crisis comes at a time when the ANC was still dealing with the fallout from revelations that Zuma is basically in the pocket of the Guptas, the notorious family which has been offering cabinet posts to various people from their Saxonwold compound. These revelations by themselves are a major crisis for the ANC. It shows graphically that under capitalism, politicians are beholden to the the ruling class and not to the masses of ordinary people. It makes a mockery of the Freedom Charter’s call that “The People shall govern!”

The storm surrounding the Guptas has set off the alarm bells in the boardrooms of big business in Johannesburg. The recklessness of the Guptas has laid bare the inner workings of bourgeois democracy. At a time of crisis and stress, the last thing the bourgeois need is for ordinary people to start questioning the entire system.

It is for this reason that they have now decided to launch an all-out assault on the Gupta empire. In a carefully coordinated attack by the big capitalists, two of the country’s big banks, ABSA and Firstrand, closed the accounts of Oakbay Investments, an 85% Gupta-owned holding company, without providing any reasons. Simultaneously, its auditors, KPMG, and its sponsors on the Johannesburg Stock Exchange, the investment bank SASFIN, also quit all ties with the company with immediate effect. The JSE itself then warned Oakbay that since it does not have sponsors and auditors, the company would be de-listed from the stock exchange.

This was a devastating move for the Guptas. The company’s share price went into freefall. Oakbay Resources and Energy released a statement saying that Atul and Varun Gupta had resigned as Director and as CEO of the company with immediate effect. Simultaneously, Duduzane Zuma, President Zuma’s son, resigned as non-executive director of Shiva Uranium, a major subsidiary.

In panic, Oakbay Investments CEO Nazeem Howa wrote a letter to staff, which was leaked to the media, saying that the Gupta family has stepped down from all executive and non-executive positions “following a period of sustained political attack on the Gupta family and our businesses.” He stated also that “The closure of our bank accounts has made it virtually impossible to continue doing business in South Africa.”

They also revealed that they wrote to President Zuma and three cabinet ministers, bitterly complaining about the banks: “To this end we have been in direct contact with the ministries of labour‚ finance‚ mineral resources and the Office of the President to express deep disappointment over the decisions of our banking partners and to make it very clear that livelihoods are at risk if we are unable to restore these important banking relationships.”

Late on Friday night there were also reports that ANN7, a Gupta-owned television channel, would struggle to pay its staff’s monthly salaries. Later it was revealed that the two other big banks, Nedbank and Standard Bank, also cut ties with the family. Because of the highly monopolised nature of the South African economy, the simultaneous onslaught by the Big Four banks means that Oakbay effectively cannot do any financial transactions, putting its entire existence in jeopardy. Big business, the banks, and the Rupert-Oppenheimer section of the ruling class have thus effectively carried out a calculated corporate coup over last few days. On Sunday, City Press broke the dramatic news that two of the Gupta brothers have quietly left for Dubai. They also reported that the rest of the family will join them shortly.

This changes everything. Big business has decided to go for the jugular in its war against its junior wing. They have clearly come to the conclusion that the Gupta family has become too big for its boots, and is now a threat to the stability of the capitalist system. By making an example of the Guptas, big business has thrown down the gauntlet to its junior wing. These moves have now raised the stakes considerably. For the upstart capitalists, it is now a matter of survival.

There can be no better example of the lengths to which the capitalists will go, even devouring some in their own class to save the wellbeing of their system a whole. These developments will have major implications politically. Should big business succeed in pushing the Guptas out altogether, it will change the situation in the ANC materially. It will kick out the crutch on which Zuma stands, and it will boost Mantashe and Ramaphosa in the ANC. Without the support of his main capitalist backers, Zuma now stands exposed before his political rivals and their big-business sponsors.

Jacob Zuma stands in the middle of this war between the capitalists. As President, Zuma balances between two contradictory wings of the ruling class. On the one hand there is big business, which oversees a relatively modern capitalist economy. On the other hand there is the upstart junior wing, which survives mainly through tenders and government contracts, and the scraps which fall from the table of big business.

Under previous Presidents—Mandela, Mbeki, and Motlanthe—the balance of forces within the ruling class has always been heavily in favour of big business. But whereas Mandela’s personal qualities and high moral authority fitted the objectives of big business to stabilize the system after the revolutionary storms of the 1980s and 1990s, equally, Zuma’s lack of these qualities—his short sightedness, his peasant outlook, personal ambition, deceitfulness, and his excessive personal dependence on donors like Schabir Shaik earlier, and the Guptas now, to sustain his himself and his family—all conspired to push him more and more towards the openly corrupt junior wing of the capitalists. The recklessness of the Guptas has now brought them into direct conflict with big business, with Zuma balancing in the middle. In turn, this further highlights the lack of his personal defects even more. Thus, squeezed by both wings of capital, Zuma now, in fact, embodies a system in crisis.

An existential crisis

For decades the African National Congress has had a virtual monopoly on the support of the black masses. It was the organisation they used to fight against the apartheid dictatorship. In 1994, after the most heroic struggle led by the working class, the ANC became the governing party of South Africa. Now, the 104-year-old former liberation movement finds itself in the middle of the deepest crisis in its existence.

Two decades ago the ANC won political power on the back of overwhelming support from the masses. For the masses, the fight for democracy was a fight for a material improvement in their lives. On the back of the stabilisation of the economy, gains were made initially in the provision of basic services such as electricity, water, and sanitation.

But under capitalism all gains for the working class are only temporary. With the 2008 global crisis came the return of the attacks on the living standards of workers. In 2009, in just one year, more than one million jobs were lost. Earlier, under the presidency of Thabo Mbeki’s GEAR macroeconomic policies, the labour market was reformed to make it more flexible through an increase in outsourcing and casualisation, and through the introduction of labour brokers. Under Zuma these policies have been continued, and the attacks on workers are now endorsed under the so-called National Development Plan.

The workers responded to these attacks with a massive increase in strikes, protests, and demonstrations in the last few years. This rise in the class struggle had an immense impact on the ANC. The SACP’s move in 2009 to join the government which was implementing capitalist policies, in a period of rising class struggle, opened up an enormous political vacuum to the left of the ANC. The emergence of the EFF and the radical metalworkers union NUMSA is the clearest manifestation of this.

This process, the breakup of the ANC along class lines, is the root cause of the crisis we see today. On the one hand of the class divide there are Zuma, Mantashe, Ramaphosa, and all the other representatives of the ruling class in the ANC. On the other hand there are the ordinary workers, students, and the poor. The opposing interests of these two class forces determines everything inside and outside of the ANC.

Because of its historically colossal influence on South African society, the developments inside the ANC have a direct impact on the whole country. Together with the lack of a mass revolutionary party, the crisis could last for years. In the process it will take all kind of convulsive forms. The country is now in its most turbulent period ever. The fate of the ANC over the coming years will affect society in every meaningful way possible, and is bound to have the most fundamental impact on the class struggle.

South African society is moving through a profound crisis affecting it at all levels—economically, socially, and politically. The root cause of this is the capitalist system, which has reached its limits. In the case of South Africa this situation has reached acute levels.

But the first signs of a coming revolutionary storm are divisions, splits, and fighting within the ruling class. Dialectically, revolution does not start at the bottom, but at the top. Unable to rule in the old way and take society forward, the ruling class starts to experience all kind of splits as it seeks to find a way out of the impasse. It is these splits and divisions which open the way for the entrance of masses on to the arena to change society. This coming revolution in South Africa will affect the entire continent and will reverberate throughout the planet.