#CabinetReshuffle divides ANC, undermines Zuma

Support for President Zuma within the ANC NEC is divided. File picture: Antoine de Ras/Independent Media

Support for President Zuma within the ANC NEC is divided. File picture: Antoine de Ras/Independent Media

Published Mar 31, 2017

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Johannesburg - President Jacob Zuma's

midnight sacking of his finance minister shook South African

markets on Friday, undermining his authority and threatening to

split the African National Congress (ANC).

Deputy President Cyril Ramaphosa, who is one of the leading

candidates to replace Zuma as ANC president, described the

decision to remove Finance Minister Pravin Gordhan as "totally,

totally unacceptable".

The comments by Ramaphosa, who usually publicly backs Zuma,

were a sign of deepening divisions in the ANC that are likely to

worsen until the party elects a new leader in December.

Zuma's cabinet reorganisation rallied support, however,

among powerful sections of the party that are hostile to banking

interests they see Gordhan as representing.

The Women's League and the influential ANC Youth League welcomed the reshuffle, which included moving former Youth League leader Malusi Gigaba, 45, from home affairs to replace

Gordhan, 67.

"Younger ministers will mean more transformation," Youth

League leader Collen Maine said, citing hopes for land

redistribution for poor black farmers, free education and more

black involvement in state financial institutions.

Ramaphosa said Zuma removed Gordhan on the basis of a

"spurious" intelligence report that accused him and his deputy

Mcebisi Jonas of plotting with banks in London to undermine the

South African economy. Jonas was also fired by Zuma.

"I told the President so, that I would not agree with him on

his reasoning," he said.

Opposition parties and ANC sources say Zuma removed Gordhan

because he was obstructing Zuma's allies' access to state funds.

Zuma and his followers have been accused by opponents and

some senior ANC members of corruption and links with the wealthy Gupta family. A report by the Public Protecor last year said the Guptas influenced Zuma in making

government appointments.

The Guptas and Zuma deny the allegations.

Gordhan said "we should all be afraid" when government

decisions are made outside formal structures.

Ramaphosa and former African Union Chairwoman Nkosozana

Dlamini-Zuma are viewed as the front-runners to replace Zuma.

Dlamini-Zuma is Zuma's ex-wife and he is expected to support

her while a separate faction will back Ramaphosa, analysts say.

ANC Secretary General Gwede Mantashe also openly criticised

Zuma, in what analysts believe is a sign he will back Ramaphosa.

"I'm very uncomfortable because areas where ministers do not

perform have not been touched. Ministers who have been moved,

the majority of them are performing ministers," Mantashe told

Talk Radio 702.

"I felt like this list has been developed somewhere else and

was given to us to legitimise it," Mantashe added, in a comment

that will fuel speculation Zuma is being influenced by people

outside government.

Rumours Zuma was to replace Gordhan have unsettled markets

all week and ANC members urged the president to reconsider.

The rand has fallen 5 percent since its highest

point on Thursday prior to the reshuffle and is set for its

biggest weekly decline since December 2015. Banking stocks

were down more than 5 percent on Friday and bond yields

climbed sharply.

Late on Friday evening, Zuma presided over the swearing in

of new ministers and deputy ministers.

High risk

Zuma's determination to change his cabinet has thrown the

ANC into its deepest crisis since it swept to power under Nelson

Mandela at the end of apartheid in 1994.

Opposition parties called for Zuma to resign; but analysts

mostly predicted Zuma would survive the fallout after picking

Gigaba to replace Gordhan, a more prudent choice than investors

had feared, despite concern budget discipline would falter.

Zuma met with the most senior members of the ANC, known as

"The Top Six", late on Thursday to inform them of the reshuffle

but flouted accepted procedure in deciding not to consult them.

"Jacob Zuma has taken a huge political risk, possibly the

biggest political risk of his career thus far," Daniel Silke,

director at Political Futures Consultancy said.

"This will put further strain on an already fractured ANC.

Zuma will survive but he will survive within an ANC that finds

itself unable to accomplish just about anything."

So far the race to replace Zuma has been muted but the

divisive reshuffle is likely to split the ANC into two sides,

one aligned to Zuma and the other to Ramaphosa, a former trade

union boss turned business tycoon.

"These tensions will barrel into the ANC’s succession debate

and here we expect the president’s move has strengthened the

support for Mr Ramaphosa," Simon Freemantle, Senior Political

Economist at Standard Bank said.

Business and political leaders condemned Zuma and predicted

that South Africa's sovereign credit rating would be downgraded

to "junk" in the coming months.

Fitch, one of two rating firms that rate South Africa's

credit score just one notch above junk, said the reshuffle could

weaken public finances and standards of governance if the fiscal

consolidation championed by Gordhan became less of a priority.

Tripartite alliance partner, the South African Communist Party said the firing

of Gordhan, who was seen by investors locally and abroad as a

champion of fiscal responsibility, risked triggering the looting

of treasury.

Last year the Constitutional Court ordered Zuma to repay 7.8

million rand ($579,004) in inappropriate state spending on his

sprawling Nkandla homestead. 

Reuters

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