Zuma orders finance minister back from UK amid reshuffle signs

JOHANNESBURG

South African President Jacob Zuma has ordered his finance minister to return from an overseas investment trip, the presidency said on Monday, fuelling speculation that a cabinet reshuffle is imminent.

President Zuma’s decision to recall Pravin Gordhan from Britain has led to media and opposition speculation that he could be sacked. The two men have had an increasingly uneasy relationship in recent months.

Friction has soared between Mr Zuma, who is seeking to fund a “radical economic transformation”, and Gordhan who is taking a stand against graft and heavy spending.

The main opposition Democratic Alliance warned that the developing incident would be seen as “a major setback for the economy in South Africa” and was a prelude to a reshuffle.

“(It) is so bizarre that it appears, at best, calculated to humiliate the minister or, at worst, to suggest that the minister is about to be fired in a cabinet reshuffle,” said shadow finance minister David Maynier.

Local media have also speculated that the recall is a precursor to a change of personnel at the top of government.

“Fears are growing that President Jacob Zuma will finally pull the trigger and reshuffle his Cabinet,” wrote the Daily Maverick news site.

The tension has also spooked the foreign exchange markets with the rand losing almost three percent against the US dollar on the day, with $1 now buying 12.65 rand. The treasury could not be reached for comment.

GRANTED REPRIEVE

“President Jacob Zuma has instructed the Minister of Finance, Mr Pravin Gordhan and Deputy Minister Mcebisi Jonas to cancel the international investment promotion roadshow to the United Kingdom and the United States and return to South Africa immediately,” the presidency said in an emailed statement which did not give a reason for Gordhan’s recall.

South Africa was granted a reprieve at the end of last year when rating agencies did not drop it to the “junk” investment category following a series of downgrades, but they warned of the impact of poor growth and political instability.

Nomura market analyst Peter Attard Montalto said that the week ahead could prove critical for South Africa’s political and economic stability.

“It seems this week is going to be really decisive either way. It is also possibly that Zuma wants PG there if he only reshuffles the deputy,” he wrote in a note to investors.

RESHUFFLE READY

“A reshuffle is ready to go and something Zuma wants to do. It could be deployed rapidly if Zuma does want to do it... This is going to be a key week for political risk.”

In December 2015, Zuma suddenly sacked Mr Gordhan’s predecessor Nhlanhla Nene and replaced him with an obscure lawmaker, triggering panic among investors and a sharp drop in the rand.

There have been signs that Ms Nkosazana Dlamini-Zuma may soon return to government in South Africa after she handed over reigns of the African Union Commission (AUC) chairmanship.

Dr Dlamini-Zuma returned home mid this month after completing her AUC tenure in Addis Ababa, Ethiopia. Dr Dlamini-Zuma, 67, was married to President Zuma, 74, but divorced in 1998 and they have four children together. 

“We’re aware of plans to assign her to Cabinet and obviously you have ministers who have shown they are not on the president’s side. One of them is likely to take the fall,” the deputy minister said. 

Mr Zuma is on record as saying the ANC is ready for a female leader and the job will not automatically go to his deputy Cyril Ramaphosa.

Mr Ramaphosa is considered Dr Dlamini-Zuma’s biggest challenger for the top post. The winner of the presidency of the ruling party would be a strong favourite to succeed Mr Zuma as president after the presidential elections in 2019.

The ANC has won every election since the end of apartheid in 1994.