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Briefing South Africa The Economist December 9th 2017 23

Captured state Also in this section
25 Business and Jacob Zuma

NELSPRUIT
The ANC, the country’s ruling party, has the chance to loosen PresidentJacob Zuma’s
grip on power. Itshould take it
IVE us back our money!” shouts Cy- of“state capture”. Unfamiliar elsewhere in tector, Mr Zuma’s son Duduzane drove
“Gril Ramaphosa, deputypresident of the world, the term is in widespread use in them both to the Guptas’ house, where
South Africa. A 5,000-strong crowd at the South Africa, especially since the publica- Ajay Gupta told Mr Jonas that they were
Communist Party rally at Nelspruit Rugby tion in October2016 of“State ofCapture”, a going to make him finance minister. When
Club in Mpumalanga, South Africa’s report by Thuli Madonsela, the former he rejected the proposal, Mr Gupta offered
north-eastern province, picksup the chant. public protector—an ombudsman whose him 600m rand, asking if he had a bag in
Mr Ramaphosa is campaigning to be elect- powersare guaranteed bythe constitution. which he could take 600,000 rand at once.
ed leader of the ruling African National It investigated claims that the three Gupta Two months later Nhlanhla Nene, the
Congress(ANC) and thusthe party’scandi- brothers, business associates ofMrZuma’s widely respected finance minister, was
date for the presidency in 2019 at a confer- son, Duduzane, had excessive influence fired and replaced by an unimpressive
ence that starts on December 16th. He and over South African politics, from which backbencher. That was on a Wednesday.
Nkosazana Dlamini-Zuma, ex-wife and they profited. Ms Madonsela concluded The rand lost 9% of its value over the next
protégée of Jacob Zuma, the current presi- that there were many questions to answer, couple of days. The new man, known as
dent, are joint favourites. The central issue and called fora judicial inquiry. the “weekend special”, was removed after
in the leadership contest is corruption. four days. Mr Gordhan was backin the job
“December represents a binary mo- Captive audience by the followingMonday.
ment for South Africa,” says Colin Cole- The nub of the “state capture” argument is Firing principled individuals under-
man, head ofGoldman Sachs’s South Afri- that Mr Zuma and his friends are putting mines institutions, as the experience ofthe
ca office. Mr Coleman supports Mr state-owned enterprises and othergovern- South African Revenue Service (SARS)
Ramaphosa, as do COSATU (the trade-un- mental institutions in the hands of people shows. When the post-apartheid govern-
ion movement, from which Mr Rama- who are allowing them to loot public ment came to power, the state was deeply
phosa hails) and the South African Com- funds. The result, accordingto Pravin Gord- in debt. “The key in any society is the com-
munist Party. Goldman Sachs, unions and han, twice Mr Zuma’s finance minister, pliance culture. In the apartheid era, it
the Communist Party rarely find them- fired most recently in March this year, is wasn’tthere, because ofsanctions-busting.
selves on the same side, but hostility to Mr that “150bn-200bn rand ($11bn-15bn) has That infected everything,” says Mr Gord-
Zuma has made for strange—and numer- been looted.” Some global companies are han, who became commissioner of SARS
ous—bedfellows. During his second term implicated (see next story). in 1999. Ivan Pillay, a former exile and
in power, the president has alienated al- The mostegregiousexample ofinterfer- memberofthe ANC’sguerrilla wing, Umk-
most all of big business, civil-society orga- ence in political appointments concerns honto we Sizwe, became head of enforce-
nisations, the churches and the union the finance ministry. In 2015, according to ment. In the next decade the tax take on
movement, alongwith much ofhis party. evidence that Mcebisi Jonas, a former dep- banks’ profits rose from 1% to 21% and the
The principal charge againstMrZuma is uty finance minister, gave the public pro- number of individuals paying tax from 1