Gigaba an unknown quantity - analysts
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Johannesburg - South Africa's President
Jacob Zuma 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.
A steep decline in the rand underlined Gordhan's reputation
among investors as a guardian of policymaking stability in South
Gigaba has been Home Affairs Minister, while Buthelezi did
not hold a position in the cabinet and was a backbencher in
Zuma also made several other changes in his cabinet,
affecting ministries such as energy, police, tourism and others.
He brought in new faces and moved some ministers to new
Speculation over cabinet changes began when Zuma called a
meeting of the ruling African National Congress' top officials
on Thursday evening.
"I have directed the new ministers and deputy ministers to
work tirelessly with their colleagues to bring about radical
socioeconomic transformation and to ensure that the promise of a
better life for the poor and the working class becomes a
reality," Zuma said.
Earlier, the ANC-allied Communist Party (SACP) said Zuma had
told its officials on Monday that he planned to sack Gordhan.
The SACP said it had objected, while the main opposition said it
would call a vote of no-confidence in Zuma over the matter.
For the second consecutive day, the influential ANC Youth
League issued a statement on Thursday backing Zuma's planned
Local assets have been under pressure since Monday, when
Zuma ordered Gordhan to abandon an investor roadshow in Britain
and fly home. Zuma gave no reason for the recall.
Gordhan said upon his arrival on Tuesday that he was still
finance minister. On Wednesday, he said he would "open a new
chapter" of his life if sacked.
Gordhan first served as finance minister from 2009 to 2014
and was brought back by Zuma in December 2015 to calm markets
spooked by the president's decision to replace his respected
successor, Nhlanhla Nene, with a little-known politician.
Opposition leader Mmusi Maimane, leader of the Democratic
Alliance, urged resistance to Zuma's decision to fire Gordhan
and Jonas. "We cannot sit by and let this happen," he said.
Gigaba was an unknown quantity, analysts said.
"The market will struggle to digest Gigaba. We think this is
bad for the market and for SA," Nomura emerging markets analyst
Peter Attard Montalto said in a note.
"We view this as an open attack on Treasury to replace
people who are conservative and anti-corruption with people
loyal to Zuma."
Some pundits say Gordhan is being pressured by a faction
allied to Zuma, which has clashed with him over his plans to
rein in government spending, the management of state enterprises
and the running of the tax agency as the economy stagnates.
Africa's most industrialised economy faces the risk of being
downgraded to junk status owing to weak economic growth after it
got a reprieve last year. The economy grew by 0.3 percent in
2016 versus 1.3 percent in the previous year.
"The little that we know at the moment is that its probably
not good news for the markets because he (Gigaba) doesn't have
any real finance experience," said Noelani King Conradie,
managing director at NKC African Economics.
"This definitely raises the risk of rating downgrades and it
is going to continue the uncertainty about future economic
Zuma shrugged off pressure from within his own party, the
opposition as well as the business circles to keep Gordhan.
Two senior sources told Reuters on Thursday that Zuma was
considering offering to step down next year, at least 12 months
before his term ends, in a deal with his opponents in the party
that would see Gordhan leave office now.
On Wednesday, sources within the ANC told Reuters there was
a split down the middle among its six most senior officials over
whether Gordhan should be sacked.
Julius Malema, leader of the ultra-left Economic Freedom
Fighters (EFF) and a former protege of Zuma, filed a court
application for disciplinary or impeachment proceedings against
the president on Thursday.
Daniel Silke, a political analyst and director at Political
Futures Consultancy said Zuma had taken a risk.
"This has been a long time coming. The president has clearly
taken a politically risky decision to remove a finance minister
who is well regarded both domestically and internationally," he