DA threatened exit could collapse GNU after ANC reneges on proposal

Negotiators on Thursday night scrambled to salvage the government of national unity (GNU) after a disagreement between the ANC and DA over the crucial trade & industry ministry threatened its collapse.

It was hoped that a scheduled call on Thursday night between President Cyril Ramaphosa and DA leader John Steenhuisen would break the impasse.

An outraged DA threatened to walk out of the GNU after Ramaphosa altered the terms of the agreement and withdrew an earlier offer to give it the key trade & industry portfolio.

It is understood that Ramaphosa withdrew his offer after a meeting of the ANC’s top brass on Wednesday night, at which he was convinced that offering the strategically important ministry to the DA would result in a pushback of the “levers of economic redress”.

DA leaders told Business Day that they had had enough and that if their party was not offered the key ministry they would “walk away” from the unity government. The DA said it had bent over backwards to accommodate the ANC’s demands.

Since the negotiations began, they had agreed to vote for Ramaphosa’s presidency and supported the ANC candidate for speaker of parliament. They also agreed to give up the positions of deputy president and minister in the presidency.

Overall, the DA had agreed to back down from the eight cabinet positions it initially agreed with the ANC in the original statement of intent and helped the ANC to get an extra seat in KwaZulu-Natal when the IFP wanted to lowball them, DA leaders said.

Ramaphosa had also backtracked on an earlier agreement that the deputy finance minister should have cabinet rights.

Tension between the DA and Ramaphosa emerged earlier this week after letters exchanged between Steenhuisen and Ramaphosa were leaked.

Ramaphosa lashed out at the DA, saying that he believes the party has jeopardised the foundation of setting up the GNU. Ramaphosa accused the DA of constantly shifting “goalposts” during negotiations.

According to a letter seen by Business Day, the ANC has proposed to give the DA six cabinet minister positions and seven deputy ministers.

The tension escalated on Tuesday night after Ramaphosa reneged on a deal brokered earlier in the day and withdrew an offer that had been accepted by the DA. The offer included the trade & industry portfolio.

According to the ANC’s revised offer, the DA would still get six ministerial positions, but not trade & industry, which is considered a key portfolio in the economic cluster and critical to the ANC’s transformation agenda. The number of deputy ministers was also revised downwards.

The lack of consensus between the leaders has had a dire effect on the rand, which firmed to its best levels in months last week, when the GNU was announced. On Thursday it fell as much as 2.2% in intraday trade to a worst level of R18.51/$, its weakest point in two weeks.

The previous ANC administration used the trade & industry portfolio, under the guidance of Ebrahim Patel, to regulate the economy and drive transformation through programmes such as broad-based BEE, import duties, sector master plans and the use of the public interest provisions of the Competition Act, much of which is antithetical to the DA’s ideology.

The DA regards the ANC’s trade & industry policy as protectionist and is in favour of increasing market access through comparative advantage and specialisation. It would prefer to scrap master plans and has a different approach to redress through BEE. Also, it does not support the minister having the power to intervene in mergers & acquisitions to pursue public interest concerns.

omarjeeh@businesslive.co.za
endsorl@businesslive.co.za