Expectations Gordhan will go leave South African markets on edge

PUBLISHED: Wed, 29 Mar 2017 12:25:00 GMT

South Africa’s currency and bonds weakened again on Wednesday as expectations rise that President Jacob Zuma will sack finance minister Pravin Gordhan following the funeral of anti-apartheid icon Ahmed Kathrada later in the day.

“Speculation is that the duo may be fired tomorrow evening, after Uncle Kathy’s funeral,” Zuma’s one-time protege Julius Malema said on his Twitter feed, referring to Gordhan and deputy finance minister Mcebisi Jonas.

Malema, the firebrand leader of the Economic Freedom Fighters (EFF) party, is also a former leader of the Youth League of Zuma’s ruling African National Congress (ANC).

The rand fell by 1 percent against the dollar in early trade. Local assets have been under pressure since Zuma ordered Gordhan on Monday to abandon an investor roadshow abroad and fly home, triggering speculation about his future. Zuma has not given a reason for the recall.

Gordhan is seen as an emblem of stability by many investors and his comment on returning to South Africa on Tuesday that he was still the finance minister helped trim the rand’s losses.

Zuma is expected to act at or after a cabinet meeting later on Wednesday, the start of which has been postponed to enable ministers to attend Kathrada’s funeral.

“The reshuffle is imminent,” Daniel Silke, a director at Political Futures Consultancy said. “I think it’s coming once the funeral is over, it’s just a matter of time.”

Kathrada, an anti-apartheid activist who was sentenced to life imprisonment alongside Nelson Mandela, was an open critic of Zuma and the president will not attend his funeral in compliance with the wishes of Kathrada’s family.

Njabulo Nzuza, the Secretary General of the ANC Youth League, called for cabinet changes.

“There should be no panic in the country, a cabinet reshuffle, which can only be done by the president, is part of normal government operations,” he said in a statement.

Talk Radio 702 said Gordhan’s dismissal had been discussed on Monday at talks between Zuma and the South African Communist Party, allies of the ANC.

Some pundits say Gordhan is being pressured by a faction allied to Zuma, which has criticised his plans to rein in government spending as the economy stagnates.

(Reporting by Olivia Kumwenda-Mtambo; Writing by James Macharia; Editing by Catherine Evans)

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