S. Africa's government remains stable after Gordhan sacking-Deputy President

Cornelia Mascio
Aprile 2, 2017

Africa's most industrialized economy faces the risk of being downgraded to junk status owing to weak economic growth after it got a reprieve a year ago.

The currency slipped, and people protested outside parliament and the national treasury against the dismissal of Finance Minister Pravin Gordhan, the widely respected steward of one of Africa's biggest economies and a bulwark against perceived efforts to raid state coffers for personal gain. The recall caused South Africa's rand to lose almost 5 percent, another blow to Africa's most industrialized economy that has stalled amid high unemployment.

South Africa faced political and financial turmoil on Friday after President Jacob Zuma fired the finance minister in a Cabinet reshuffle, intensifying a rift in the party that took power after the 1994 end of white minority rule as well as concerns about corruption at top levels of government.

Banking stocks were down more than 5 percent on Friday and bond yields climbed sharply.Opposition parties called for Zuma to resign but analysts mostly predicted Zuma would survive the fallout after picking home affairs minister Malusi Gigaba to replace Gordhan, a more prudent choice than investors had feared.

Frustration has been growing with Zuma after numerous allegations of corruption. The outcry by funeral-goers including the ex-wife of Nelson Mandela, Winnie Madikizela Mandela, further exposed the ruling party's divide.

President Zuma made a number of other changes in the cabinet to improve, he said, "efficiency and effectiveness" and "bring about radical socio-economic transformation".

"Zuma has bowed to the whims of those who determined to enrich themselves at the expense of the poor and jobless", the country's main opposition party, the Democratic Alliance, tweeted after the announcement.

Rumours Zuma was to replace Gordhan have unsettled markets all week and members of the ANC urged the president to reconsider. The party on Thursday said it would launch a vote of no confidence in Zuma in parliament.

On Thursday, Julius Malema of the Economic Freedom Fighters approached the Constitutional Court in South Africa for the impeachment of Zuma.

Instead, the party called for its members to display unity.

"We must chase Zuma and his cronies out of office".

This follows in the wake of a late-night cabinet shuffle which effectively relieved South Africa's finance minister, Pravin Gordham from his position.

Late previous year, prosecutors dropped fraud charges against Gordhan that were criticized by many South Africans as politically motivated and deepened concern about alleged government mismanagement.

The ANC will vote for Zuma's successor in December with Deputy President Cyril Ramaphosa and former African Union Chairwoman Nkosozana Dlamini-Zuma viewed as the front-runners.

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.

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