J. Zuma battles to save presidency as filth piles up and ANC warns of 'mafia state'

Jacob Zuma faces a battle to save his presidency as ruling party leaders prepare for a showdown this weekend over a controversy engulfing the government that one top official said is threatening to turn South Africa into a “mafia state.”

The meeting of the African National Congress’s decision-making National Executive Committee comes after revelations that the Guptas, who are Zuma’s family friends and business partners of his son, offered ministerial posts to ruling party officials.

On Wednesday, Deputy Finance Minister Mcebisi Jonas said he rejected a proposal made personally by the Gupta brothers that he take over the finance ministry position.

“We need to deal with this; it will degenerate into a mafia state if this goes on,” ANC Secretary-General Gwede Mantashe told Bloomberg Thursday by phone. “The fact we are talking about this so boldly now shows that things are going to change.”

The country’s worst political crisis since the NEC recalled Thabo Mbeki as president in 2008 comes at a time when the economy is threatened with recession and hovering close to a junk credit rating, and just months before the country is due to hold municipal elections. 

A failure by the ANC to deal decisively with the scandal could erode support for the party, which has won more than 60% of the vote since apartheid ended in 1994.

But counter-intuitively, Jonas’ statement has already created some positive sentiment. South African bonds this week surged the most since December, a benchmark stock index climbed to a four-month high and the rand rallied for a second day as investors speculated Zuma’s grip on power is loosening.

South Africa’s economy is highly financialised; what happens in the financial markets has a large impact on the economy, and thus bond movements can be seen as a reliable indicator of the market mood.