Former finance minister Pravin Gordhan. Picture: Supplied
Uncertainty over President Jacob Zuma’s possible Cabinet reshuffle has negatively affected the markets.
According to analysts, Zuma is in a precarious position in terms of a possible reshuffle in what seems a move to drive out Finance Minister Pravin Gordhan, once and for all.
“The uncertainty over this reshuffle is not good for our markets,” said political analyst Daniel Silke.
“It has brought political risk back into the equation, causing the rand to drop and bond yields to spike
“It won’t be a compromised decision. His best way is to keep Gordhan, or replace him with someone who is relatively the same.”
He added that anyone stepping into Gordhan’s chair should be seen as equally important and as well respected as Gordhan.
Gordhan was summoned by Zuma on Monday from an international investor roadshow in the UK and Europe, creating fears that the reshuffle would occur this week.
“The vendetta may be a personal one. Ultimately, this is a motive for him to replace Gordhan.
“And if this motive is to only satisfy demands of those who support Zuma, the replacement will be doing the bidding of the demanders.”
Silke predicted that while there is a range of replacements Zuma may look to, it would not be former Eskom boss and now ANC MP Brian Molefe, given that his history was compromised.
He pointed to Sfiso Buthelezi, who was sworn in as ANC MP last year, as a candidate who would be friendly toward the markets.
“An expert could also be brought from outside.
“Individuals coming from the private sector may also be seen as alternatives.
“Basically, it may be someone less controversial.”
Gordhan attended the funeral of struggle veteran and icon Ahmed Kathrada on Wednesday – and received a standing ovation after being recognised by a speaker as a man of integrity.
He was moved to tears after Ahmed Kathrada Foundation director Neeshan Balton pointed out that he stood for the same principles as Kathrada.
“When Pravin Gordhan was to appear in court, Uncle Kathy told us he wanted to be the first one there to accompany him into court,” Balton said.
“Irrespective of whether you are a minister or not in days or weeks to come, you are true to the values and principles that Ahmed Kathrada would have been proud of.”
Economist Mike Schussler agreed that uncertainty had negatively affected the markets and said he hoped Zuma would choose an individual with the same financial background as Gordhan.
“It must not be someone Zuma can control.”
He was not certain that South Africa would escape a downgrade and, therefore, the correct individual must be able to convince agencies and investors.
“I don’t know if they can grab any such person who is seen as too close to him [Zuma].
“It also can’t be a person who nobody knows.
“It has to be someone who has a market background.”
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