With the walls closing in, and an openly divided ANC, president Jacob Zuma is at his weakest, most vulnerable point\u00a0–\u00a0and is left with only\u00a0a “scorched earth” option open to him.<\/p>\n
This is according to Nomura analyst, Peter Attard Montalto, in\u00a0a 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.<\/p>\n
The analyst says that the latest action by finance minister Pravin Gordhan<\/a><\/strong> – requesting the court to rule he is not obliged to\u00a0intervene in the Gupta bank account issue – has pushed Zuma into a corner, after a year of hard knocks to his faction.<\/p>\n 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<\/a><\/strong> – closely aligned with Zuma, and at the centre of the state capture controversy implicating the\u00a0president.<\/p>\n “We are likely to see a counter attack by Jacob Zuma’s faction and the most important However, seeing the tit-for-tat nature of the Zuma vs Gordhan ‘war’, further charges may lead to further revelations from Treasury.<\/p>\n 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.<\/p>\n The current situation is as follows, according to Nomura:<\/p>\n Zuma is backed into a corner to a large degree by the latest action.<\/strong><\/p>\n “It\u00a0is increasingly clear he lost an opportunity to undertake PGxit two months ago\u00a0before 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\u00a0internal constituency that the market struggles to understand,” Attard Montalto said.<\/p>\n “Nor should we\u00a0underestimate his ability to undertake what the market might deem an\u00a0‘irrational’\u00a0course of action like a scorched earth strategy. This is now what we\u00a0most fear as it seems ‘simple’ routes out for him are increasingly unavailable.”<\/p>\n People from various factions have expressed support for Pravin Gordhan\u00a0and tacitly opposed Jacob Zuma. <\/strong><\/p>\n “We should not underestimate the\u00a0cohesiveness of his faction nor its size.”<\/p>\n The Top 6 of the ANC are largely divided and acting against each other.<\/strong><\/p>\n “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.”<\/p>\n Parliament’s ANC caucus is increasing and openly splitting into two factions which is new since the last NEC meeting.<\/strong><\/p>\n “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.”<\/p>\n “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.”<\/p>\n “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.”<\/p>\n According to Nomura president Jacob Zuma is unpredictable, making any solid forecasts on the outcomes impossible.<\/p>\n However, the group identified key events for investors to keep an eye on in the coming months:<\/p>\n Zuma\u2019s \u2018war\u2019 for Treasury has just begun: analyst<\/a><\/strong><\/p>\n Zuma still holds power over the ANC \u2013 but the cracks are starting to show<\/a><\/strong><\/p>\n These are the 7 \u2018shocks\u2019 awaiting South Africa if Gordhan is booted<\/a><\/strong><\/p>\n
\nevent to watch is whether the NPA moves to charge Pravin Gordhan on the so-called<\/a><\/strong>
\n SARS ‘rogue spy unit’ issue<\/a><\/strong>,” the analyst said.<\/p>\n
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More on Zuma<\/h3>\n