March 18, 2016 / 8:13 AM / 2 years ago

South Africa's Zuma under pressure as Eskom ex-boss alleges Gupta influence

PRETORIA (Reuters) - The crisis engulfing South Africa’s ruling ANC intensified on Friday as the ex-boss of South Africa’s state power firm became the latest figure to accuse a business family with ties to President Jacob Zuma of wielding undue influence.

South Africa's President and ANC party president Jacob Zuma reacts as he attends the party's National Executive Committee (NEC) three-day meeting in Pretoria, March 18, 2016. REUTERS/Siphiwe Sibeko

The saga has added to investor concerns about governance and stability in Africa’s most industrialized economy but the African National Congress said there were no plans to address it at a three-day meeting of the party’s leadership.

“There is no item on that matter. If it comes, it comes and will be part of the discussions,” African National Congress secretary-general Gwede Mantashe told reporters.

Zola Tsotsi, who resigned a year ago as chairman of Eskom, told the Mail & Guardian newspaper his exit had been orchestrated by the Guptas, who were accused this week of offering cabinet posts to two ANC politicians.

“Two months after the appointment, they called me and said they will have me fired because I am not playing the game. I was forced to resign shortly after that,” Tsotsi told the weekly.

The row exploded on Wednesday when Deputy Finance Minister Mcebisi Jonas said the Gupta family had offered him former finance minister Nhlanhla Nene’s job shortly before Nene was dismissed in December. Zuma rejected the claims in parliament on Thursday, saying that as president only he appointed ministers.

The Guptas, a family of Indian-born businessmen who moved to South Africa in the early 1990s, have denied trying to influence political appointments, saying they are the victims of a plot.

“We play no role in the hiring and firing of anyone outside of our own business ... These allegations are nothing more than political gossip and innuendo,” said Nazeem Howa, CEO of Oakbay Investments, part of the Gupta business empire.

The affair has helped drive wild swings in the value of the rand, which plummeted in December after Zuma sacked Nene.

Investors fear further political uncertainty could hasten a credit ratings downgrade, potentially into “junk” territory, which would sharply raise South Africa’s borrowing costs.


The ANC National Executive Committee meeting comes ahead of local elections due after May in Johannesburg, Pretoria and elsewhere, at which the party faces stiff challenges.

The party’s top decision-making group is stacked with Zuma loyalists and is unlikely to turn against him, analysts say, although they expected the Gupta issue to be discussed behind closed doors.

“For the public face it’s ‘we are completely united, the President has done nothing wrong, we are fully behind him and we love him to death, et cetera, et cetera,” NKC African Economics analyst Gary van Staden said.

“Behind the scenes there are people who are saying ‘listen sir, this is starting to damage our electoral prospects’”.

Former ANC treasurer Matthews Phosa said there was a growing sense that the relationship between the Guptas and Zuma, whose son sits on the boards of at least six Gupta companies, was unhealthy for South Africa.

“This sensation is repeating itself ad nauseam. We are beginning to wonder whether those who say it is not true are themselves being genuine,” Phosa told Talk Radio 702. “I think it is true and I think the Guptas must stop it.”

Leading financial newspaper, Business Day, said the ANC had to act to curb the Guptas’ influence but doubted it would go as far as ditching Zuma — as it did former president Thabo Mbeki in 2008. Mantashe said on Thursday that Zuma’s removal was not on the agenda.

The anti-corruption office headed by respected lawyer Thuli Madonsela said it was considering whether to investigate the involvement of the Gupta family in state affairs.

As he answered questions in parliament on Thursday, Zuma did not have the air of a man fearing for his political future.

“Forgive the cynicism, but the few voices against the ANC’s colonization by Zuma and his family benefactors does not yet constitute a groundswell,” South Africa’s leading financial newspaper, Business Day, said in an editorial.

Additional reporting by TJ Strydom and Olivia Kumwenda-Mtambo; Writing by James Macharia; Editing by Catherine Evans

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