By TINTSWALO BALOYI
JOHANNESBURG – SOUTH African President Jacob Zuma’s overnight cabinet reshuffle has thrown the country into uncertainty.
The reshuffle affected ten departments, most prominently the axing of Pravin Gordhan, as Finance Minister, and his deputy, Mcebisi Jonas.
Opposition parties have slammed the move with indications of a vote of no confidence pushed through Parliament.
The Rand leaped to 13,45 to the United States Dollar and has pushed back to 13,60 in early morning trade.
“Rand weakness in this entire episode has been far more constrained than we thought likely,” stated Rand Merchant Bank.
The financial institution stated, “The risks in our view are still for far bigger losses than suffered so far.”
Among issues raising uncertainty is whether Zuma would reverse his decision to fire Gordhan as he did with the axing of Nene in December 2015.
“The presumption must be that this is extremely unlikely: he surely prepared much better this time around and would not have acted unless he was confident he would not have to reverse his decision,” RMB argued.
It wondered whether there would be mass resignations from the cabinet and if Zuma’s deputy, Cyril Ramaphosa would also resign, as has been rumoured in some media.
“Ministers from the SA Communist Party will surely feel they need to go. The bigger question is whether Deputy President Ramaphosa also goes. The more people who go, the more pressure will build on President Zuma.”
Another concern was a possible backlash within the ruling African National Congress and broader society to force Zuma out of office.
“This also looks unlikely,” the firm said arguing Zuma has the backing of most members of the ANC’s National Executive Committee.
However, it projected protests at the decision by Zuma, who is increasingly losing popularity among impoverished South Africans.
“Protests on the street are highly likely, but don’t mean much unless they get the NEC or parliament to act.”
Save South Africa announced a march in the capital Pretoria on Friday to “chase Zuma and his cronies out of office.”
“We must take this defence of democracy to the streets,” the group said, announcing a march to Pretoria on Friday.
RMB was awaiting how rating agencies would respond to the reshuffle, projecting agencies woulddowngrade the sovereign credit rating by a notch.
– Guardian