“Scorched earth” the only option left for Zuma: analyst

With the walls closing in, and an openly divided ANC, president Jacob Zuma is at his weakest, most vulnerable point – and is left with only a “scorched earth” option open to him.

This is according to Nomura analyst, Peter Attard Montalto, in a note sent to investors on Monday. Attard Montalto told investors that the ongoing political ‘war’ in South Africa has entered into its end-game, with the country entering into a “vortex of risks” and unpredictability.

The analyst says that the latest action by finance minister Pravin Gordhan – requesting the court to rule he is not obliged to intervene in the Gupta bank account issue – has pushed Zuma into a corner, after a year of hard knocks to his faction.

It is not the motion itself that is putting pressure on Zuma, Attard Montalto said, but rather the documents attached to it, which have blown open previously secret information on suspicious payments made by the Gupta family – closely aligned with Zuma, and at the centre of the state capture controversy implicating the president.

“We are likely to see a counter attack by Jacob Zuma’s faction and the most important
event to watch is whether the NPA moves to charge Pravin Gordhan on the so-called
SARS ‘rogue spy unit’ issue,” the analyst said.

However, seeing the tit-for-tat nature of the Zuma vs Gordhan ‘war’, further charges may lead to further revelations from Treasury.

Factoring in Zuma’s unpredictability, and penchant for making decisions and taking actions that do no subscribe to conventions of “rationality” – one possible outcome could be a “scorched earth” policy; and Parliament should be watched very closely in the coming weeks, Attard Montalto said.

The current situation is as follows, according to Nomura:


Zuma is backed into a corner to a large degree by the latest action.

“It is increasingly clear he lost an opportunity to undertake PGxit two months ago before the G20 and again shows that one of his flaws is decisive timing. However, we should not underestimate the fact he appeals to a particular internal constituency that the market struggles to understand,” Attard Montalto said.

“Nor should we underestimate his ability to undertake what the market might deem an ‘irrational’ course of action like a scorched earth strategy. This is now what we most fear as it seems ‘simple’ routes out for him are increasingly unavailable.”


People from various factions have expressed support for Pravin Gordhan and tacitly opposed Jacob Zuma.

“We should not underestimate the cohesiveness of his faction nor its size.”


The Top 6 of the ANC are largely divided and acting against each other.

“We think the NEC still backs Jacob Zuma with a decent majority and has seen no particular shift. As far as we can tell, no pro-Zuma NEC members have come out publically for Mr Gordhan yet.”


Parliament’s ANC caucus is increasing and openly splitting into two factions which is new since the last NEC meeting.

“We still believe the anti-Zuma faction is small but the fact ANC Chief Whip Jackson Mthembu is not supporting Mr Zuma means parliament is the most significant force to watch.”

“That said, we still think the caucus would close ranks around President Zuma in the event of a no confidence motion against him by opposition parties, though the forthcoming DA motion of support for the National Treasury may be a more complex matter.”

“We still believe that the parliament would only act against Jacob Zuma if it had the approval of the NEC but this assumption is weakening.”


According to Nomura president Jacob Zuma is unpredictable, making any solid forecasts on the outcomes impossible.

However, the group identified key events for investors to keep an eye on in the coming months:

  • The DA motion in parliament supporting National Treasury – possibly this week. “This is a clever political strategy, which is not as significant as a no confidence motion, intended to prevent people closing ranks around President Zuma but also try to convert recent senior ANC support for PG in the press (including from Mr Ramaphosa) into an actual vote.”
  • Cabinet resignations – “We outlined last week the risk of this if the public protector report came out. Now more information from this report is being revealed, so this remains a possibility and a backdoor route to PGxit.”
  • Jacob Zuma’s public protector interdict court case on Tuesday – most likely adjourned until 1 November along with other cases.
  • More commentary from both sides. “These could include a response from President Zuma’s side to the Gordhan affidavit, and also possibly from the SARB and the banks.”
  • Spy unit charges – “As hinted at by the NPA last week, the investigations are currently being finalised and it seems charges could be forthcoming shortly, with the process sped up for political ends.”

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“Scorched earth” the only option left for Zuma: analyst