South Africa's new finance minister notes 'mutual suspicion'

South Africa's new finance minister notes 'mutual suspicion'

As South Africa reels from the news of another Cabinet reshuffle overnight, the damage to business confidence and a renewed threat of a ratings downgrade should not be underestimated.

South Africa's new finance minister, Malusi Gigaba, signaled a swing to the left on Saturday, saying "we need to radically transform the South African economy" while pledging to maintain fiscal stability.

Gordhan a year ago faced fraud charges that were criticised as a move to oust him by Zuma's associates.

The ANC, which came to power in South Africa's first free elections in 1994, now faces one of its biggest tests since leading the struggle against the apartheid regime. "I don't think we will or should try to be reckless about it", Gigaba said in response to a question about the programme.

But he said fiscal policy would not be done simply in the interests of big business and capital.

Gigaba vowed to empower the country's black majority by spreading around wealth that according to him has been concentrated in a small number of hands. Gigaba is a Zuma loyalist with no experience in economics or budgeting. The opposition Democratic Alliance made significant gains in municipal elections a year ago with the ANC losing control of Johannesburg, Pretoria and Port Elizabeth. With growth below 1% past year, South Africa is in danger of a credit downgrade that would increase its foreign borrowing costs.

The rand has fallen 5 percent since its highest point on Thursday prior to the reshuffle.

The turmoil comes as South Africa is facing reviews by credit ratings agencies that could see it lose investment-grade status and make it more costly to borrow.




"I have directed the new ministers and deputy ministers to work tirelessly with their colleagues to bring about radical socioeconomic transformation and to ensure that the promise of a better life for the poor and the working class becomes a reality", Zuma said. Ramaphosa is seen as a likely candidate to succeed Zuma as ANC leader at the ruling party's conference in December.

"I have my reservations on the process followed and the manner in which this cabinet reshuffle was done", Mkhize said in an emailed statement.

The dismissal of finance minister and other cabinet ministers is expected to cause chaos in the country.

The organisers of the march, The Save South Africa Campaign and recently formed South African Federation of Trade Unions, called Zuma's decision "a coup against the people of this country".

Mkhize also says the ANC needs to admit there are several serving minister whose performance is unsatisfactory, and the ANC leadership can not justify to be seen to have ignored these factors in a reshuffle.

In a statement, Zuma said he had decided to make changes to the National Executive in order to improve efficiency and effectiveness. Many other ANC members also opposed it, he said. She may be able to shield him from looming graft charges after he is out of office, but she has little support among the ANC's electoral base.

Zuma and his followers have been accused of corruption and links with the wealthy Indian Gupta family. He has denied any wrongdoing. The ANC must choose - either the people of South Africa or the Guptas.

As the recently departed US Ambassador to South Africa put it on Twitter, "Holy wow". Even his deputy president, Cyril Ramaphosa, called the move "totally, totally unacceptable".

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