Johannesburg - President
Jacob Zuma made a close associate energy minister on Tuesday as
his government tries to push through a big nuclear deal but his
sacking of another minister was seen undermining his ANC party's
ruling alliance.
The rand and South African bonds fell in value
after Zuma's second Cabinet reshuffle in seven months, with the
rand 1 percent lower on the day against the dollar.
"The market is taking it slightly negative," said Rand
Merchant Bank fixed income specialist Michelle Wohlberg.
Zuma is unpopular with many investors after sacking
respected finance minister Pravin Gordhan in March, a move that
hit South African financial assets and helped tip the country's
credit ratings into "junk" territory.
#CabinetReshuffle it’s a move to make #BladeNzimande pay a clever move to divide SACP whilst consolidating a move to nuclear #StateCapture
— Zwelinzima Vavi (@Zwelinzima1) October 17, 2017
He changed six ministers in all on Tuesday, including those
for home affairs, education and communications. Blade Nzimande,
a fierce critic of Zuma whose South African Communist Party
(SACP) is a key ally of the African National Congress,
was axed as higher education minister.
President Jacob Zuma and SACP General Secretary Blade Nzimande at the Peter Mokaba Stadium in Polokwane at Cosatu's May Day rally in 2014. Picture: Matthews Baloyi
The appointment of David Mahlobo, formerly state security
minister, to head the energy ministry will heighten speculation
that the 75-year-old president is trying to push through the
nuclear deal before his second term ends in 2019.
"The appointment of Mr Mahlobo to head up the energy
department needs to be seen in the context of the President
wanting to push ahead with the proposed nuclear energy
programme," Jeffrey Schultz and Nic Borain, analysts at BNP
Paribas South Africa said.
South Africa is preparing to add 9,600 megawatts of nuclear
capacity -- equivalent to up to 10 nuclear reactors -- in a
contract that could be worth tens of billions of dollars and
would be one of the biggest nuclear deals anywhere in decades.
How desperate is Zuma for nuclear deal that he keeps reshuffling. Seems now, he has a more captured minister in portfolio. We need a new gov pic.twitter.com/jsNks9L3pk
— Mmusi Maimane (@MmusiMaimane) October 17, 2017
Companies including Russia's Rosatom, South Korea's Kepco,
France's EDF and Areva, Toshiba-owned Westinghouse
, and China's CGN are eyeing the project, which has been
criticised by South African civil society groups and the
opposition for lacking transparency.
Investors are also worried about the potential impact of the
project on South Africa's already strained public finances.
Former energy minister Mmamaloko Kubayi, who was only
appointed in March, was moved to the communications ministry.
Shaky alliance
Contrary to speculation, Zuma did not appoint Nkosazana
Dlamini-Zuma, his ex-wife and former African Union chair, to a
Cabinet position ahead of the ANC's December conference to
choose a new leader.
Zuma is said to favour Dlamini-Zuma to take over from him at
the party's helm, instead of Deputy President Cyril Ramaphosa.
But his removal from the cabinet of Nzimande, a vocal critic
of Zuma's scandal-plagued presidency, risked widening a rift
with ANC allies the SACP and trade union federation Cosatu ahead of
national elections in 2019.
Nzimande is general secretary of the SACP, which has 17
members of parliament. He has criticised Zuma over his links
with the Guptas, a family of Indian-born businessman who have
been accused of using their influence to secure lucrative state
contracts for their companies.
Zuma and the Guptas have consistently denied any
wrongdoing.
#SACP Statement on the removal of comrade Dr Blade Nzimande from Cabinet. @YCLSA @MYANC @_cosatu @SANCONationale @PresidencyZA pic.twitter.com/9oItSZDtE6
— SACP (@SACP1921) October 17, 2017
"This is a clear declaration of war on the SACP by President
Zuma," the SACP's first deputy general secretary Solly Mapaila
said, although he did not indicate the party would leave the
ruling alliance.
#Mantashe In April, 5 ministers were removed, the debate was about 1 minister. It was unfair to others. It was a massive #CabinetReshuffle
— Year of OR Tambo (@MYANC) October 17, 2017
ANC Secretary-General Gwede Mantashe acknowledged that
Nzimande's sacking would have a negative effect on relations
with the SACP and said relations within the alliance were at
"their lowest at this point in time".