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
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.”
BUSINESS REPORT ONLINE