South Africa's Billion Rand President

By: Gareth van Onselen

 How much Jacob Zuma costs the South African taxpayer.






FEATURE: Cars, jets, VIP protection, spousal support, almost every week a new figure emerges suggesting that those privileges afforded President Zuma (and other members of the executive) are costing the taxpayer much money; but how much exactly is hard to say. No one has ever tried to total it all. The Presidency has certainly done everything in its power to shield the information. I have given it my best shot in the article below. It was a very difficult exercise but, using the Ministerial Handbook as a guide and by being very conservative, I have generated a total figure. To see it all set out, how much President Zuma costs per year and per term, and whether or not you think it’s excessive, read on.....

Introduction
The point of the exercise to try and derive a credible and defensible total figure for all primary direct expenses afforded to President Jacob Zuma by the Ministerial Handbook and for which the public – the taxpayer – is ultimately responsible. This is not an exact science. In every instance, I have been extremely conservative and thus, while the total figure might not represent the actual cost, I believe it certainly does represent the absolute minimum cost. Most likely, the final and ultimately unknowable total will be far, far higher.
It is not my purpose to analyse the cost or to give an opinion as to whether or not the amount can be described as exorbitant. I am merely setting out the facts. Regardless of whom served as President, a variation of the costs listed in this document would have to be born by the public purse. Likewise, one would have to take the opportunity costs into account and inflation. Whether or not the bridge between reasonableness and opulence has been crossed, I leave to you, the reader, to determine.
The document that follows is essentially divided into three sections. First, a summary. I have called this ‘The Zuma Balance Sheet’ and it follows below these introductory remarks. It is, essentially, all the key numbers totaled. Second, an explanation, in which I try to set out my reasoning in arriving at each number and some additional context, to try and set the scene, where appropriate. Third and finally, I have concluded with some supplementary information, based on the final numbers.
By way of concluding this introduction, a few brief words about the methodology. Zuma took office on 9 May 2009. For each amount I have tried to determine an annual cost (April to April) and the cost of a full five year term. I have assumed his term will end in April 2014 (there is a three month window in which an election can be called). No doubt there are many incidental costs I have not covered (I suspect they are too small to make a real impact) and probably one or two more substantial items I have not thought of – I am happy to adjust the document in this regard, and will aim to update and improve it. That said, again, the total amount can only really be adjusted upwards.
There are three kinds of figures:
[1] Those which can be fairly accurately quantified and which are publically available (his salary, for example);
[2] Those partly known and which can be broadly quantified or projected (allowances, for example); and
[3] Those which are unknown and which, in some cases, can be credibly estimated.
I have made use of the Ministerial Handbook as a guide to expenses. Although it doesn’t mention the Presidency specifically, the Presidency is on record saying it “currently rel[ies] on the ministerial handbook” for precedent. It gives a general framework and direction for the costs associated with the highest office in the country. For all intents and purposes, however, it remains a generally useless document. It was approved by Cabinet in February 2007 and although the government has been promising a new one for over two years now, nothing has materialised. It is vague and incomplete; and so badly written and constructed as to invite abuse – which has invariably and frequently happened.
Likewise, the Presidency’s Annual Reports hide figures within other figures (the Spousal Unit, for example) and makes oversight as difficult as possible. It is incredible hard, often impossible, to tie hard numbers to the amorphous parameters set out in the Handbook. The ANC’s refusal to establish a portfolio committee for the Presidency makes accountability even harder. Often one has to rely on parliamentary questions (the answers to which are hardly a model of transparency) and other sources.
A defining feature of this exercise, then, was how much effort the Presidency puts into hiding, concealing, manipulating and covering up its costs. The Presidency is an ostensible model of transparency and a very real example of secrecy. Putting this together was extremely difficult.
Here, then, is how much Jacob Zuma costs you.
The Zuma Balance Sheet
1. Annual Salary: [R2 275 802.00 to R2 753 689.00]
• Approximate Five Year Total: R12 315 706.00
2. Medical Aid: [At least R1 300 000 per year]
• Approximate Five Year Total: R6 500 000.00
3. Pension Payout on Retirement: [Approximately R2 753 689.00]
• Approximate Five Year Total: R2 753 689.00
4. Spousal Support: [At least R15 517 500.00 per year]
• Approximate Five Year Total: R77 585 000.00
5. Private Vehicle: [70% of salary - R1 835 792.00, for two vehicles]
• Approximate Five Year Total: R3 671 584.00
6. Flights – VIP Squadron: [An approximate average of: R46 838 476.00 per year]
• Approximate Five Year Total: R234 192 383.00
7. Flights – Additional: [R6 331 174.67 plus additional cost of two planes]
• Approximate Five Year Total: R10 000 000.00
8. Flights – VIP Protection Services: [Unknown]
9. Flights – Helicopters: [At least R14 400 000.00 per year]
• Approximate Five Year Total: R72 000 000.00
10. Overseas Allowances – President: [An average of R25 400.00 per year]
• Approximate Five year Total: R127 000.00
11. Overseas Allowances – First Ladies: [Unknown]
12. Accommodation – Hotels: [An average of R420 000.00 per year]
• Approximate Five Year Total: R2 100 000.00
13. Accommodation – Official Residences: [An average of R5 300 000.00 per year]
• Approximate Five Year Total: R26 500 000.00
14. Accommodation – Private Residences: [R6 400 000.00]
• Approximate Five Year Total: R6 400 000.00
15.VIP Protection [An average of at least R12 000 000.00 per year]
• Approximate Five Year Total: R60 000 000.00
16. Legal Costs: [Unknown]
APPROXIMATE FIVE YEAR TOTAL: R514 145 362.00
AVERAGE ANNUAL TOTAL: R102 829 072.00

At the very least, President Zuma will cost the South African taxpayer R514.1m over five years – an average of R102.8m per year; in other words, half a billion Rand. Were he to secure another term, his Presidency would cost the South African public, at least, R1 billion.

I have not adjusted some of these figures for inflation. VIP Protection, for example, is all based on a 2009 sum. At a modest average of 5% over this five year period, the R60 million I have projected would be closer to R75 million if inflation were taken into account. And, the R46.8 million per year on VIP Squadron flights is only based on figures up to April 2012. At 5% it would be closer to R51m per year by 2014. Obviously, if one projected the total figure forward to a second term, that too would not take inflation into account, easily an additional R130million. So, this is worth bearing in mind when considering just how conservative the total cost is.
Breakdown of Costs
1. Annual Salary [Known]: Zuma recently agreed to an inflation-related 5.5% salary increase, as recommended by the Independent Commission for the Remuneration of Public Office Bearers, bringing his annual salary to R2 662 561.00, up from R2 485 839.00 and backdated to 1 April 2012. Zuma was inaugurated on 9 May 2009. His annual salary breakdown over that period is as follows:
• 1 April 2009 – 1 April 2010: R2 275 802.00 (11 months, R2 086 151.00)
• 1 April 2010 – 1 April 2011: R2 367 466.00 (1 year, 5% increase)
• 1 April 2011 – 1 April 2012: R2 485 839.00 (1 year, 5%)
• 1 April 2012 – 1 April 2013: R2 622 561.00 (1 year, 5.5%)
• 1 April 2013 – 1 April 2014: R2 753 689.00 (1 year, projected 5% increase)
• Five Year Total: R12 315 706.00
I projected the Presidency’s salary for 2013/14 at R2.75m based on a 5% increase, which is typical. The five year total is approximately (and very near to): R12 315 706.00.

Context: The graph below sets out how the President’s salary has grown over the last nine years. A significant increase occurred under President Mbeki, just before Zuma took office, when it jumped by almost R1 million, from approximately R1.2m to R2.1m in 2008/09. Zuma’s current salary makes him among the best-paid state-leaders in the world. Indeed, possibly among the top ten, certainly the top twenty.

Graph 1: The President’s Salary

[To view all graphs full size, right click on the graph and select 'view image']

2. Medical Aid [Known]: Zuma gets at least R1.3m as a medical aid contribution per year, outside of his salary. This would increase marginally with any salary increase so this is a conservative estimate. Five years at R1 300 000.00 equals approximately: R6 500 000.00 million.
3. Pension [Known]: On a monthly basis, like every employed person, part of Zuma’s salary goes to his pension (according to the Ministerial Handbook 5% from the executive member, 17.5% from the state). Outside and on top of that, however, he gets a lump sum paid into his pension on retirement, based on his salary, in accordance with the Remuneration of Public Office Bearers Act. That percentage fluctuates depending on recommendation from the Independent Commission for the Remuneration of Public Office Bearers. In 2008, the Commission recommended, exclusively for the President, the lump sum amount get increased from 75% to “equal to 100% of the annual remuneration paid to him or her on the day prior to his or her retirement from office”. If Zuma gets a 5% increase next year, as set out above, the total pension payout figure on Zuma’s retirement will be: R2 753 689.00.
4. Spousal Support [Known]: According to the Presidency, the budget for the Presidential Spousal Support Unit was R15 517 500 million for the 2009/10 financial year. At that time, Zuma had five wives. He now has six. So this will be a conservative estimate. The total over a five year term, at R15.5m per year, is thus at least: R77 600 000.00.

Context: According to the reply to a March 2010 DA parliamentary question, the amount allocated to the Spousal Support Unit had increased from R4.5m in 2004/05 to R8m in 2007/8, to R15.5 million in 2009/10 under Zuma. In other words, it has effectively doubled. Significantly, the only way you can get information on the Spousal Unit is through parliamentary questions. There is no longer a stand alone line item for it in the Presidency’s Annual Report (there used to be) and no dedicated programme of action for it in the Presidency’s strategic plan. It is money spent with no identifiable outcome attached to it. And for the last two years, its full costs are unknown.

Graph 2: The Spousal Support Unit Budget

5. Official Vehicles [Known]: The Ministerial Handbook states that every member of the executive is entitled to be reimbursed for any capital expenditure paid for the purchase of a private vehicle. Regulations set the amount at 70% of one’s annual salary and allow for two cars: one in Cape Town and one in Pretoria. 70% of Zuma’s currently salary is R1 835 792.00 which would make the total amount available to him R3 671 584.00. Cars can be replaced when they have travelled 120 000km or after five years. At the very least, then, Zuma would have purchased two new cars during his term, one in Cape Town and one in Pretoria, for a total amount to the taxpayer of, at least: R3 671 584.00

Context: The amount they could spend was originally set at 50% but was then adjusted to 70%. Following a public outcry, it has been reported that the revised Handbook (over two years in the negotiating and yet to be seen or adopted) has proposed a new figure of 60%, 10% higher than the original mark. If adopted, that would allow Zuma to purchase two cars each to the value of R1 573 563.00 or a total spend of R3 147 073.00.

6. Flights – VIP Squadron [Known]: For both domestic and international flights President Zuma is flown by a special squadron of dedicated VIP jets, reserved for senior members of the executive and operated by the Department of Defence. The primary such plane, a Boeing reserved for the President, is called Inkwazi.  In response to a DA parliamentary question, the amount and costs of those flights for Zuma’s first three years were recently revealed to be:
• April 2009 – April 2010: 91 Flights
• April 2010 – April 2011: 92 Flights
• April 2011 – April 2012: 97 Flights
The total costs of those 286 flights was revealed to be R140 515 430.15, at an average cost of R491 000 per flight. Thus, the annual cost would be approximately R46 838 476.00 and the total cost, over five years, would be: R234 192 383.00.
7. Flights – Additional [Known]: The flights listed above are only those undertaken by the VIP squadron. However, the President has made use of other aircraft on an ad hoc basis. In September 2011, for example, while the Presidential Jet was being serviced, the Department of Defence hired a Boeing 727 to fly Zuma to America. In reply to a DA parliamentary question, the full cost of that flight was revealed to be R6 331 174.67. However, it was later revealed that two further planes had ‘shadowed’ Zuma’s flight, in case his plane suffered some shortcoming – a South African Airways Airbus A340 and a Bombardier Global Express XRS, requiring around 35 crewmembers. The cost of these additional flights is not known but, together with Zuma’s Boeing, the exercise is conservatively estimated to have cost R10 000 000.00. How many times this has happened during President Zuma’s term is unknown.

Context: According to a document submitted to the National Assembly defence committee, operational spending on the President’s Jet for 2004/05 was R11m, rising to R23m in 2005/06 and just over R24m in 2006/07. The total amount for this period – R58m – was however later increased to around R78m.

8. Flights – VIP Protection Services [Unknown]: In November 2009 the reply to a DA parliamentary question revealed that the South African Police Service (under which the VIP Protection unit falls) had purchased a Cessna Citation Sovereign private business jet, at a cost of R150 million, among other things to “transport VIP protection service advance teams to countries in Africa“. It is not known how often or at what cost the jet has been used to send advance teams ahead of presidential visits to other African countries.
9. Flights – Helicopters [Partly Known]: The DA currently has a parliamentary question before the Minister of Defence about Zuma’s costs in this regard. The helicopters form part of the VIP Squadron. He typically uses them for interim flights; for example, between the official residence King’s House in KwaZulu-Natal and his private residence in Nkandla. According to experts, an hour flight in such a VIP helicopter would cost between R60 000 and R80 000. It is understood that a ‘shadow’ helicopter follows the one escorting the President. A return flight to Nkandla in such a helicopter would last approximately five hours. If we use the conservative figure of 15 such flights a year at four hours per flight and at the minimum cost per hour of R60 000 for each such helicopter, that would translate to at least R14 400 000.00 per year and a five year total of: R72 000 000.00.

Context: The figures for all flights cited above are massively conservative. The costs sited in response to the DA’s parliamentary question on aeroplanes does not, for example, include maintenance costs (Inkwazi – the President’s jet – recently spent three months undergoing maintenance in Switzerland, we don’t know how much that cost). It also doesn’t include the costs of additional slip crews (as many as four could be used for a single flight). Helicopter flights are almost entirely unknown and, likewise, when the costs are revealed, in all likelihood the President will have undertaken far in excess of the 15 flights I have estimated and, as with aeroplanes, they won’t include maintenance.

10. Overseas Allowances – President [Known]: Working out allowances for overseas travel is a tricky business, the amounts are also very small and I was hesitant to include them. The Ministerial Handbook states members and accompanying spouses are entitled to an allowance “equal to 110% of the daily allowance payable to Directors-General during visits abroad”. That amount is re-determined every year by the Department of Public Service and Administration. You can find the 2011 amounts here. In 2010 Zuma spent 25 days overseas on official state visits. Another 49 days on other business (summits, etc.) for a total of 74 days abroad. Using the DPSA amounts I have determined an average amount for the state trips of 127 US dollars a day for the President. (This is complicated, but I have set it out below). Over the course of 2010 (April 2010 through April 2011) that works out to approximately R25 400.00 and, if we use 2010 as an average, R127 000.00 as a five year total.
2010: Presidential State and Working Visits
1. India (State Visit, June 2010); (DPSA stipend: 79 US Dollars) (3 days);
2. Libya (working visit July 2010); (102 US Dollars) (2 days);
3. Zimbabwe (working visit, July 2010); (109 US Dollars) (2 days);
4. China (State Visit, August 2010); (117 US Dollars) (3 days);
5. Russia (State Visit, August 2010); (127 US Dollars) (3 days);
6. Lesotho (State Visit, August 2010); (84 US Dollars) (2 days);
7. Egypt (State Visit, October 2010); (107 US Dollars) (2 days);
8. Cuba (State Visit, December 2010); (121 US Dollars) (3 days);
9. Mexico (State Visit, December 2010); (78 US Dollars) (3 days);
10. France (State Visit, March 2011); (107 US Dollars) (2 days);
TOTALS:
• 25 days and $1 148
• $1 148 divided by 10 equals an average of $115 per day, per trip;
• 110% of $115 equals an average of $127 per day;
• Multiply that by 25 days equals $3 175;
• Multiply by an exchange rate of 8 Rand to the Dollars equals:
• R25 400.00
2010: Other Visits
I won’t set them all out (you can find the full list here) but Zuma undertook a further 23 trips abroad (49 days) in 2010 on other business, for a total of 33. I have not calculated the total cost in allowances for these as, when hosted by another country the allowance drops to 30%, so small as to be incidental to the total and in the majority of cases, the President would have been hosted.
11. Overseas Allowances – First Ladies [Unknown]: As set out, when accompanied by his wives, they each are entitled to the same allowance as Zuma qualifies for. It is difficult to determine how many of his wives accompany him on each trip. Some reports have suggested as many as four have accompanied him. I have not included a total because the amount would be incidental and, in all likelihood, is covered by the budget for Spousal Support Unit.
12. Accommodation – Hotels [Unknown]: If one again uses 2010 as an average, of the 74 days abroad, the President would have spent 42 days overnight. It is difficult to tell where Zuma has stayed, but an internet search suggests the hotels used have been upmarket. In India he stayed at the five star Taj Mahal Palace Hotel. One night there in a luxury suit costs approximately R25 000 per night. The Presidential suit, even more. In New York he is report to stay at the Carlton Ritz, costing as much as R50 000 a night. If we take a conservative average of R20 000 per night and assume half his nights overseas – 21 – are funded by the South African state, that works out to an annual average of R420 000.00 and a five year total of: R2 100 000.00
13. Accommodation – Official Residencies [Partly Known]: The Ministerial Handbook allows for members of the executive to stay rent free at official residences. The President has five such residencies available to him: Mahlamba Ndlopfu (Pretoria); Genadendal (Cape Town); Oliver Tambo House (Pretoria); Highstead (Cape Town) and Dr John L Dube House (formerly King’s House, Durban). They are each managed by the Department of Public Works. Obviously the cost of maintenance and upkeep of these houses must accrue to the President. So confusing has government information on this been, however, it is difficult to determine a figure. In October 2011, the Minister of Public Works stated in reply to a DA parliamentary question that as much as R400 million was to be spent on renovations for them. That figure was then refuted. I have excluded that amount, whatever it is, as the residences are national buildings and renovation and restoration is standard. However, it is possible to estimate the running costs. In a response to a parliamentary question in November 2009, Minister in the Presidency Collins Chabane revealed that the running costs of the five presidential homes was in excess of R5 300 000.00 for 2009/10, excluding the salaries of the 113 staff employed to service them. A conservative five year total is thus: R26 500 000.00.
14. Accommodation – Private Residencies [Partly Known]: The President owns a number of private homes, for him and his wives. Of these, two are his primary private residencies: a house in Forest Town, Johannesburg and Nkandla, in KwaZulu-Natal. Obviously the cost of the houses and their maintenance is for the President’s private expense but the Ministerial Handbook does oblige the state to provide security for them. How much has been spent on the Forest Town residence in this regard is unknown, but an amount has definitely been spent as it is surrounded by security and has been described as a “bunker”. More is known about Nkandla. According to a reply to a DA parliamentary question in August 2010, R6 400 000.00 was spent on security for the home, including a helipad, clinic and road bypass.
15. VIP Protection [Partly Known]: Working out Zuma’s VIP protection costs is difficult. There are no exact figures and, as with so many of these types of expenses, the ANC government goes out of its way to conceal them. That said, thanks to DA parliamentary questions, it is possible to work out a credible estimate. In March 2009, the Minister of Safety and Security revealed that the state spent R998 815.89 per month protecting Jacob Zuma. That amount includes close as well as static protection (guarding his homes), overtime, vehicle and telephone costs. This was prior to Zuma becoming President. Since then, no doubt, it has increased significantly. However, we can safely use the figure of R1 million per month as a credible estimate. On that basis, the annual cost would be at least R12 000 000.00 and, over five years, at least R60 000 000.00.
16. Legal Costs [Unknown]: Zuma is currently defending himself against the DA in court, in a protracted battle to have some 400 corruption charges against him reinstated. It is unclear who is paying for these nor are the amounts known – as the cases have not yet been concluded – and so I have not included them. Were it the state, however, the additional figure would be substantial.
Costs not Included
There are a number of costs I have not included in this analysis. For example, the cost of Zuma’s inauguration (R75m), the cost of renovations done to official residencies, the cost of the town supposedly being developed outside Nkandla at the President’s behest and smaller items, like the cost of the credit card to which he is entitled (no doubt small and for which it is next to impossible to work out an amount). Essentially I have focused on the President’s running costs. Where one to include actual government programmes, you might as well include the cost of the Presidency in its entirety, which would be to defeat the purpose of the exercise.
In turn, the President is funded in numerous other ways. The ANC, for example, would pay his costs when it comes to party political activity. Likewise, the President might benefit from various private benefits, financial or otherwise.
With regards to every one of the items listed, the public is ultimately responsible for the cost and the President has a say in the amount spent. Should he so chose, he could act to reduce or increase the amount dedicated to them. So they are a fair reflection of his attitude to public office and how he goes about his day-to-day business as President.
Conclusion
One can do various things with the R514 million figure. For example, one could break it down by term, year, month, week, hour, even minute:
• Five Years: R514 145 362.00
• One Year: R102 829 072.00
• One Month: R8 569 089.00
• One Week: R1 977 482.00
• One Day: R282 497.00
• One Hour: R11 770.00
• One Minute: R196.00
Put another way, in the 15 or so minutes it has taken you to read this article, Zuma has cost the public R3 000.
One could also break the figure down into its major component parts. Over five years Zuma’s salary and related expenses will cost at least R25m; his accommodation at least R35m; his protection at least R60m and his flights at least R316m.
Here is another blog I have created setting out and illustrating some of these such figures and a few others.
As I argued at the outset, South Africa needs a President, Jacob Zuma or no Jacob Zuma, and so many of these costs would have been incurred by the public purse regardless. How one interprets them is a matter of opinion. Let me know what yours is.
What can be said definitively is that there is a fundamental with transparency on this issue: The South African public simple doesn’t know and the ANC government acts to conceal how much Jacob Zuma costs. Were it not for DA parliamentary questions, the overwhelming bulk of this information would be hidden. Indeed, very often, even where replies were secured, they had to be fought for. The truth has been resisted at every turn. That this information has been so carefully guarded must tell one something.
Perhaps it is time for the Presidency to provide the definitive answer. It might go at least someway to restoring its battered reputation. Besides, we, the public, have a right to know.
Correction (21 August 2012): I incorrectly totaled the original five year total at R517 721 164.00. It is, in fact, R514 145 362.00. Apologies. All effected figures have been corrected. As it so happens, since this post, the total has since been superseded (new costs have emerged) and now stands at R522 312 029.00. See here for more.
UPDATE: For the latest up-to-date figures, including new information, see: ‘The Billion Rand President: Update – R8.1m in Ferry Flights added‘

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