Johannesburg - President Jacob Zuma has denied reports that Finance Minister Pravin Gordhan is soon to be arrested, with economists warning that such an outcome would plunge the country into a financial crisis.
Zuma’s spokesman Bongani Ngqulunga on Sunday described this as rumours perpetuated by “information peddlers”.
However, Gordhan said he was reserving his right to comment. His spokeswoman, Phumza Macanda, said they would not comment on the reports at this stage.
Gordhan has been involved in a bitter war with Zuma for control of the National Treasury.
Zuma said a few months ago that he was intervening in a spat between Gordhan and South African Revenue Service (Sars) boss Tom Moyane. Gordhan had reportedly disapproved of the restructuring of Sars by Moyane.
Both the Hawks and the National Prosecuting Authority (NPA) have denied the pending arrest of Gordhan. Hawks spokesman Brigadier Hangwani Mulaudzi said these were rumours and he would not dignify them with a comment.
NPA spokesman Luvuyo Mfaku said there was no docket on Gordhan.
“There is no truth to this. We have not received any docket from the police on whether to prosecute or not on the Sars rogue unit,” he said. He added that the Hawks were still investigating.
Macanda also said there was no update on the calculations on the amount Zuma would pay back for Nkandla as directed by the Constitutional Court.
“As far as Nkandla is concerned, the minister has said he will give an update at an appropriate time.”
But economists warned that the arrest of Gordhan could plunge the country into a financial crisis.
Iraj Abedian of Pan African Capital and Dawie Roodt, chief economist at Efficient Group, said Gordhan’s arrest would be disastrous for the country.
Gordhan had put in a huge amount of work over the past few months to assure the international markets and investors of South Africa’s sound macro-economic stability and political certainty.
A week ago Moody’s retained South Africa’s credit rating and the country avoided a downgrade. However, Fitch and Standard & Poor’s would be making their own announcements next month.
Roodt said this had the makings of a disaster waiting to happen. He said it was clear that Gordhan and Zuma did not see eye to eye and Zuma wanted his minister out.
“Zuma can’t fire him, because if he fires him everybody will say it’s his fault,” said Roodt. “This could be a way for President Zuma to get rid of Gordhan. The rand would go into free-fall, bonds would shoot through the roof.”
Political Bureau