The perfect storm rages on

If the news about Mbeki clears the air for once and for all about that blasted arms deal, then it's a good thing.
Read time 5min 20sec

What a change a weekend can make. On Friday morning last week we knew ANC president, Jacob Zuma, had been unsuccessful in his attempt to quash vital documents in his corruption trial. We also knew there was about to be a drop in the petrol price and that inflation had probably peaked.

All of this is still true, but events since that sunny morning have overtaken the good news. By Friday afternoon commodity prices had plummeted and the JSE all share index had fallen steeply into a bear market. Saturday seemed calm enough but allegations by the Sunday Times that President Thabo Mbeki had taken a bribe related to the stupid arms deal only served to fluff up the gloomy clouds hanging over the country.

And it came just as we were beginning to think that the judiciary would be able to try Zuma fairly and that maybe, if he were to be found innocent, he wouldn't make such a bad president after all. But the news on Mbeki throws everything into disarray. Again. There are so many unanswered questions. What few people have tackled, and what few people are keen to tackle, is the timing of all of this. The arms deal was born under the leadership of former president, Nelson Mandela. Did he really not know that his deputy was taking in R30 million and did he not know why the ANC's coffers were supposedly suddenly boosted by R28 million of that money?

It seems unlikely, to me, that he didn't know.

And it is unlikely Mbeki would have handled the money alone. What about the ANC's treasurer? And what about the role of government's National Treasury?

Then there's the issue of bribery. What is a bribe? If you're handed R30 million and you give it all away (reportedly R28 million went to the ANC and R2 million went to Zuma) is it still a bribe?

I think so, but the movement of the cash certainly adds a new level of greyness to an issue that was already far from black and white.

On the one hand, we have to wonder if there's any truth to the reports at all. We have to wonder how and why the information was released now. Who benefits and who doesn't? If we were to revert to our usual explanation, we'd reckon the Zuma camp released the news in order to get rid of Mbeki, or vice versa. But both factions are hurt by the news and it casts suspicion over Mandela's government, and no one would want that. Given that it would appear the incendiary information benefits no one, you've got to start thinking that it might be true.

Although there is so much we don't know about this alleged bribe, there are some things we do know.

We know it is going to be another tough week for the financial markets and we know that the Mbeki furore will probably hammer the markets even further. South Africa's political risk profile just went through the roof. This will scare off international investors.

If you're handed R30 million and you give it all away, is it still a bribe?

Ren'ee Bonorchis is Business Day's editor at large.

We know Mbeki's presidency is now heavily under threat and if more evidence surfaces, as the Sunday Times promised it would, he may well have to step down before his term draws to its natural close. But with Zuma in the dock and his allies, like Cosatu and the ANC Youth League, still frothing at the mouth about all manner of issues, South Africa would be left in a leadership crisis.

Add to this the fact that inflation is high, interest rates have been climbing, the economy is slowing, investments are losing value and global markets are flailing, and you've got the perfect storm. So that while just a few days ago we thought the light at the end of the tunnel might not be a train, we've got to go back to basics and keep listening out for the large locomotive coming our way. In other words, keep your investments safe, don't take on unnecessary debt and prepare to sit tight for at least another year.

But before you get too depressed, South Africa is not unique. Many global financial markets are looking worse than we are. And other countries have come through more political wrangling than we're suffering right now. It's hard to think of examples here, but we are doing better than Zimbabwe. And having Hitler as a leader would have been worse. Cold comfort, I know, but sometimes it helps to think things could have been worse.

But if the news about Mbeki clears the air for once and for all about that blasted arms deal, then it's a good thing.

And the lesson we will hopefully learn is to scrutinise any large deals that could be awash with kickbacks. Like the 2010 World Cup, for instance. You can't legislate against people who are determined to defraud the system, but you can enforce more checks and balances so that those who are tempted to commit crimes are less likely to get away with it.

As for our leadership disaster, I'm afraid we'll just have to let that storm play itself out. We know Mbeki is not the kind of guy who publicly confronts issues head on. This means sensational headlines and calamitous stories on the issue will surface for months with all factions trying to spin the information to their own advantage.

If our leadership can't be wise, we have to be wise. And I don't mean it's time to pack up and leave. I mean it's time to stay calm, look after your own interests and continue to believe that if South Africa could overcome apartheid, it will overcome this storm.

* Ren'ee Bonorchis is Business Day's editor at large.

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