Could this be the end of South Africa?

Could this be the end of South Africa?

Bokang Moeko

The arrest of Finance Minister Pravin Gordhan would cause an economic earthquake and make “9/12” look like a minor economic tremor, the DA said in a statement on Sunday.

“9/12” refers to December 9 last year, when President Jacob Zuma unceremoniously sacked then finance minister Nhlanhla Nene, replacing him with the unknown David Des van Rooyen whose appointment lasted only four days before Gordhan was recalled to his old post. The aftermath of the event has been well documented and Biznews.com founder Alec Hogg calculated the immediate loss to the country as R500bn.

Responding to a Sunday Times report that Gordhan faces “imminent arrest” after Hawks handed a docket over to the National Prosecuting Authority (NPA) for his involvement in the SA Revenue Service’s “rogue unit”, DA shadow minister of finance David Maynier said the move would be a disaster for the country.

“The timing of the rumours could not be worse and would not only cause further turmoil in the markets, but also compromise efforts to avoid a ratings downgrade in South Africa,” he said.

Zuma wants Gordhan’s head – economist. I think this is an understatement and needs to be revised: Zuma wants South Africans’ heads!

Let’s take a look at the havoc Gordhan’s arrest would cause by going through what Schussler of Economists.co.za believes would happen:

“The rand will decline probably to between R18 and R20 (per dollar) very quickly. It would do so because the markets will believe that something is fishy,”Schussler said.

Consumers would feel the brunt of the impact as a weaker rand would cause price increases in goods from petrol to maize to paraffin. “It would hurt the poor people the most”, said Schussler.

Medicines are one of South Africa’s biggest imports and will cost more – but over (the space of) about a year as government only allows price adjustments once a year. This could in the meantime lead to shortages as pharmaceutical firms may decide not to import medicine they do not make money on. And this can become a matter of life and death.

On a macroeconomic level, a further downgrade to junk status – now even more likely – would make government debt more expensive, which in turn would lead to less money for basics such as education and health. Social grants would also suffer as money would be spent on servicing debts.

“The situation is very catastrophic for the economy and for us, the people of this country. Yes, final markets will show signs of strain but we the people will feel the pain in higher prices, fewer jobs, higher interest rates and less government money to help out.

“Our children will feel the pain as school books may not get replaced or schools will not be built as quickly as needed. Our firms will find life tough and they will feel the need to batten down (the hatches) even more,” Schussler warned.

The impact on foreign investment would be that many international firms and investors may never trust South Africa again. Investors may leave, and when that happens, then maybe R20 to the dollar may be an optimistic scenario.

Schussler said there needs to be a clear statement from the Hawks and the NPA that they are not probing the finance minister at all.

“For now, Pravin should be a no-go area.”

Media has reported that, according to a Treasury source, Gordhan is unperturbed. He, apparently, expected the onslaught by the state exploiters.

“The future of the crime network that was allowed to flourish in the state is now under threat. They are now hitting back,” a source has said this according to Pauli van Wyk and Pieter Du Toit, Netwerk24.

I wish it was only the future of the crime network that is under threat: the future of South-Africans, and Basotho, is under threat. Their lives will be ruined in a way that is too vast for words.

And as a Mosotho, as you deeply reflect on how those in power have ability to ruin our lives at the touch of a button, you should be challenged to think twice next time before you cast your vote.

Parents, teach your kids to be objective not subjective by voting for a change you need not a party you like. Plans for redress, growth and opportunity must be championed. Vote for a better life, future of your children, and a country you would be proud to live in #APowerful economy.

Election manifestos mean nothing. The value of a brand can only be measured in real terms by efficacy and veracity of the promise. And excellence can only be achieved by politicians who have the requisite technical and administrative knowledge and skills. Because a tight ship can only be run by people fit for the purpose.

Let us open the eye of reason. Do what is right for us and the country than be caught up in a political game of who garners more votes. Poor governance has proved to be disastrous to the economy.

A friend sent me an email: “N Korea GDP 12B, S Korea GDP 1300B: 93% richer. Same people, different government – bad policies ruin everything. Check SA, it is no longer the second largest economy in Africa on weak rand.”

What do you make of it? To politicians: It is a timely reminder that when you serve the country, your responsibility should be to its citizens – not your party.

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