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The Zondo Commission has reached the end of its seventh week. Originally scheduled to run for just three weeks, the hearings have already produced some explosive testimony – Mcebisi Jonas, Vytjie Mentor, and representatives from South Africa’s biggest banks are just some of the witnesses who have come out with startling revelations.
This week it was the turn of minister of finance Nhlanhla Nene, who for the first time shed light on his unexpected dismissal on 9 December 2015, after having been appointed to this position for the first time in May the year before. Nene’s testimony revealed that his axing was not so sudden.
The writing had been on the wall from the time he started blocking certain projects, including the controversial nuclear procurement deal with Russia. Towards the end of 2014 and over the course of the next year, Nene had been sensing disregard for National Treasury’s stance on certain important projects that would have a significant impact on the fiscus.
One of these, of course, was the deal with Russia for the construction of nuclear power plants. Another was a proposed strategy by the board of South African Airways, led by Dudu Myeni, which included the purchase of Airbus A320 aircraft through a lease-to-buy deal.
It has been estimated that the nuclear deal with Russia would have cost the equivalent of 90% of the country’s budget this fiscal year. The 2015 estimate was around $100-billion, or R1.45-trillion at the exchange rate of the time. The state’s total budget for this financial year is R1.56-trillion.
Regardless of the potential for energy generation, Nene said in his testimony, it was immediately apparent to him that the costs associated with the nuclear deal were “astronomical”, and the total investment required would have had implications for all South Africans.
Treasury officials voiced their concerns about the project but, Nene said, in the end these were disregarded. He then clashed with his energy department counterpart Tina Joemat-Pettersson, whom he said pressured him during a BRICS summit trip to Russia in July 2015. She wanted useful information that she could pass on to Zuma, but when Nene didn’t comply he received a dressing down from Zuma, who called Nene out for not having done his job as requested.
In the months that followed, Nene recalled, he sensed a hostile attitude from cabinet colleagues, notably the former international relations and state security ministers, Maite Nkoana-Mashabane and David Mahlobo, respectively.
When the axe fell, it did so quickly. Nene was called to a meeting with Zuma, after a day-long cabinet meeting at the Union Buildings. It was a “short meeting, about two or three minutes.” Zuma indicated that Nene was being deployed to the Africa regional centre of the BRICS Development Bank, following consultation with the ANC top six, the most senior leadership of the party.
The BRICS posting has never materialised.
“I thanked the president for having given me the opportunity to serve South Africa,” said Nene. Zuma gave no other reason for his removal and, Nene said, “That was the first and last time we ever spoke about the position at the BRICS bank.”
He added: “It was obvious that the ‘deployment’ to the BRICS bank was a fabrication.”
Read Nene’s full testimony.
The Zondo Commission has adjourned until 10 October.
