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South African President Jacob Zuma laughs ahead of Finance Minister Pravin Gordhan's medium term budget speech in Cape Town, South Africa October 26, 2016. (Sumaya Hisham/Reuters)
South African President Jacob Zuma laughs ahead of Finance Minister Pravin Gordhan's medium term budget speech in Cape Town, South Africa October 26, 2016. (Sumaya Hisham/Reuters)

South Africa

Abruptly dropped charges against minister a fresh defeat for Zuma Add to ...

South African prosecutors have hastily abandoned their criminal charges against the country’s widely respected finance minister, signalling a fresh defeat for President Jacob Zuma in his battle against challengers in his ruling party.

Mr. Zuma faced the growing likelihood of a rebellion by senior members of his party, the African National Congress, if the charges had gone ahead. Many ANC leaders and elders were planning a strong show of courtroom support for the Finance Minister, Pravin Gordhan, at his first court appearance on Wednesday.

A show of open defiance by top ANC members, a few of whom have already begun calling for Mr. Zuma’s resignation on corruption allegations, could have been disastrous for the embattled president. But the charges were dropped in a dramatic announcement on Monday, just two days before the scheduled court appearance. While it temporarily defused the crisis, it showed a weakening of Mr. Zuma’s legal weapons and a deterioration of his grip on power.

Related: South Africa’s Finance Minister faces fraud charges, currency plunges

Read more: Power of Gupta family in South Africa has people fearing ‘state capture’

Mr. Zuma already faces the potential reinstatement of corruption charges against him. The charges were dropped in 2009 but courts have ordered the charges to be revived. He also faces a devastating report from the Public Protector, a constitutionally empowered watchdog office, which has been investigating his role in “state capture” – the alleged takeover of government ministries by the Gupta business family, which already employs some of Mr. Zuma’s family members.

The Finance Minister, Mr. Gordhan, has been a bulwark against alleged corruption and excessive spending by state agencies that are linked to Mr. Zuma’s business cronies, and it has been widely reported that the president is seeking a pretext to get rid of him. The minister has blocked schemes that would benefit Mr. Zuma’s allies at the state electricity monopoly, the national airline and other agencies.

The head of the national prosecuting authority, Shaun Abrahams, is a close ally of Mr. Zuma. So, too, are the Hawks, the elite “priority crimes” police unit that has been investigating Mr. Gordhan.

Less than three weeks ago, Mr. Abrahams shocked the country by announcing that Mr. Gordhan was being charged with fraud in connection with an obscure and relatively trivial case of a retirement package that he had authorized for a civil servant in 2010.

The criminal charges triggered a plunge in the South African currency and sparked fears that South Africa’s credit rating could tumble into “junk” status by December. It also provoked a growing wave of outrage by civil society leaders and politicians, including many top figures in the ANC.

But on Monday, at a press conference, Mr. Abrahams admitted there was no evidence that Mr. Gordhan had intended to break the law. The rand immediately strengthened by as much as 1.8 per cent.

The case against Mr. Gordhan was undermined by revelations that Mr. Abrahams had met privately with Mr. Zuma and three cabinet ministers at the ANC’s party headquarters in Johannesburg on Oct. 10, a day before he announced the charges against the Finance Minister.

The case was further damaged by a senior government official who said he was held “hostage” by Mr. Zuma’s loyalists in a dispute over the Gordhan charges. Video clips showed the official being held in a government conference room as a bodyguard and Hawks members tried to force him to give them a document they wanted for the Gordhan prosecution. The official phoned the police during the incident, reporting that he was being held hostage.

Mr. Abrahams looked nervous as he faced a barrage of hostile media questions on Monday after he withdrew the criminal charges, just 20 days after filing them. South African journalists asked whether he would resign for a “blunder” that had damaged the economy and tainted the credibility of the prosecuting authority.

He insisted he would not resign. But he added: “Should someone’s head roll? I’ll have to look into that.”

Analysts predicted that Mr. Gordhan could file a lawsuit against the prosecuting authority for malicious prosecution.

More significantly, it strengthens Mr. Gordhan’s hand in his backroom conflict with the Zuma camp. Last year, Mr. Zuma fired a previous finance minister and replaced him with an ally of the controversial Gupta business family, but a political backlash forced him to drop the new minister and replace him with Mr. Gordhan.

Mr. Zuma’s term as president ends in 2019, but his term as ANC leader will expire at the end of next year. He faces growing pressure from critics within the party, although he is thought to retain the loyalty of a majority of the party’s national executive.

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