President Jacob Zuma

Johannesburg – The Banking Association of SA says the vacuum of leadership caused by the announcement of a Cabinet reshuffle is of extreme concern for the whole of South Africa.

Its statement – on Friday morning – comes after President Jacob Zuma on Thursday night sacked finance minister Pravin Gordhan in a cabinet reshuffle after days of speculation that has rocked the country's markets and currency, replacing him with home affairs head Malusi Gigaba.

A statement from the president's office just after midnight on Thursday said Zuma had also appointed Sfiso Buthelezi as Deputy Finance Minister replacing Mcebisi Jonas.

BASA MD Cas Coovadia says Zuma’s “actions have put our country into turmoil, at a time the country is trying to come together to address the problems we face. We have no choice but to say this reshuffle is not in the best interests of the country. We are also left with little choice but to question the motives behind this action.”

Coovadia adds the specific change in both Finance Minister and Deputy Finance Minister creates a dire loss of institutional knowledge and raises legitimate and alarming concerns regarding issues of fiscal discipline, protection of institutions and indeed.

BASA has previously voiced its deep concerns regarding the actions of the President. These have unfortunately fallen on deaf ears, he says.

“BASA objects again – and in the strongest possible terms. The President's actions directly undermine the significant progress made in the last 18 months towards building confidence in our country.

Read also: Gigaba an unknown quantity - analysts

“These actions fly in the face of the imperative we all have to ensure political and policy certainty. The President's actions go further to place all South Africans at significant risk as a result of the fall out of any potential ratings downgrade.”

Coovadia adds the position of Finance Minister is a critical one.

“An effective and credible National Treasury is also important. These institutions are pivotal to creation of certainty in markets and in management of potential risks introduced by numerous factors.

“The action of removing a Minister and a Deputy-Minister who have gained global and national credibility and were performing optimally under difficult circumstances raises questions about the rationale for their removal.

“This further makes it difficult for their successors to conduct their responsibilities as well. In short, the President's actions have created increased uncertainty and risk. This is exacerbated by the fact that some Ministers who have performed very badly and publicity criticised have been retained.”

Coovadia also notes that any sovereign downgrade would have a serious impact on banks and the business sector in general. “It will also undermine our collective ability to fund social programmes, which will severely and sustainably worsen the lives of the poorest of the poor in our country.”