Nuclear deal that led to Nene’s sacking would have cost 90% of SA’s budget
Minister says he was fired after he refused to endorse a nuclear deal with Russia
Nhlanhla Nene believes he was axed as finance minister in 2015 after he refused to endorse a nuclear deal with Russia that would have cost the equivalent of 90% of the country’s budget this fiscal year.
In 2015, the government said the programme would cost about $100bn, which, on the exchange rate at the time, would have been R1.45-trillion. The state’s total budget for this financial year is R1.56-trillion.
Other projects favoured by former president Jacob Zuma included a proposed restructuring of a deal between national airline SAA and aircraft manufacturer Airbus.
The proposed change, which the Treasury judged would have threatened the financial viability of the airline, was pushed by Dudu Myeni, a Zuma ally who was chair of the SAA board at the time.
Nene, who was fired in December 2015 in one of Zuma’s notorious “midnight” reshuffles, was the first cabinet minister to appear at the Zondo commission, which is investigating allegations of widespread corruption and abuse of power during Zuma’s presidency.
Nene was replaced by little-known ANC MP Des van Rooyen, whose tenure lasted four days, as the move sent the rand into a free fall and the country’s borrowing costs in international markets ballooned.
Nene, who returned to the finance ministry after Cyril Ramaphosa became president in February, on Wednesday also testified about his interactions with the controversial Gupta family, friends of Zuma who are at the centre of state-capture allegations that cover everything from contracts awarded by state-owned enterprises to the appointment of ministers.
Nene told the commission how it had taken Zuma about three minutes to fire him on December 9 2015, after a marathon cabinet meeting.
Zuma had told him in Zulu about a Brics (Brazil, Russia, India, China and SA) bank job at the Africa regional centre, which was going to open in Johannesburg, and then said the top six leaders of the ANC agreed that he should be redeployed there. “The entire meeting lasted two or three minutes,” he said.
Nene said Zuma made no mention of any other reasons for his removal, and he did not ask for the reasons. This was also the first and last time they spoke about the position at the Brics bank. “It is obvious that the ‘deployment’ to the Brics bank was a fabrication,” Nene said.
Finance Minister Nhlanhla Nene seemed to contradict himself when he testified at the state capture inquiry in Johannesburg on October 3 2018
“I say this because the president had no authority to offer me a position or to deploy me to a position in the Brics bank.”
Nene testified that a few months before this he was accused of “insubordination” because of his refusal to sign a letter committing SA to a deal with Russia on the nuclear build programme. This was during a Brics meeting in Russia ahead of a one-on-one meeting between Zuma and Russian President Vladimir Putin.
While in Russia, Nene said he had been pressured by Zuma and then energy minister Tina Joemat-Pettersson to sign off on the deal. This was despite there being no information on the financial implications, funding model and risk mitigation strategies.
Nene said he came to be viewed as “a person standing in the way of the nuclear deal”. The then international relations minister, Maite Nkoana-Mashabane, and state security minister David Mahlobo were also hostile towards him because of this.
Minutes from the cabinet meeting held the day Nene was fired show the executive had approved the energy department’s nuclear proposal without a feasibility study or a phased approach to procurement.
Nene also told the commission about his interactions with the Gupta family, specifically with Ajay Gupta. He said he had met the Guptas at official government events and was aware they had a close relationship with Zuma. The first time he met them was in 2009 at a presidential gala dinner.
The following year he was invited to tour the Sahara computers offices, which he did on two occasions. Nene said he had visited the Gupta’s Saxonwold home on four occasions.
He said he had become suspicious of the family’s intentions in 2013 when the Treasury investigated the Estina dairy farm matter. The case relates to allegations that millions of rands destined for poor farmers were channelled to the Gupta family.