South Africa's Gordhan ordered home from London ahead of Gupta court case
- Author: Leroy Wright Mar 29, 2017,
Mar 29, 2017, 16:47
Chatting to media folks shortly after the presidency's announcement to stop Pravin Gordhan and deputy finance minister Mcebisi Jonas from garnering investment overseas, Mantashe said there was no chit, nor chat, about the recall at the weekend's NEC meeting.
The rand weakened the most since November 10, dropping 3.2 percent against the dollar.
According to Trading Economics‚ South African government debt is about $53.8 billion‚ so Zuma's move has added about $202 million (around R2.6 billion) to the government's annual interest bill.
The main opposition Democratic Alliance said the decision to recall Gordhan "is so freaky that it appears, at best, calculated to humiliate the minister or, at worst, to suggest that the minister is about to be fired".
Mantashe says the ANC national executive committee did not discuss Zuma's instruction to Gordhan.
"We are already seeing a negative reaction to the unexplained recall", says Mabuza, who points out that the country's business reputation is as much at stake as the value of its currency.
That same day, Zuma ordered Gordhan to cancel the meetings and return home from London, causing the rand to plummet.
Gordhan said "yes" when asked by a reporter if he was still the finance minister.
South African media reports suggest Zuma and Gordhan have an uneasy relationship, though the president has denied suggestions he is "at war" with his finance minister.
Speculation that Gordhan is on the verge of being fired has swirled for months, as he clashed with Zuma over the management of state companies and the national tax agency.
Investors see Gordhan as a symbol of stability, given weak economic growth and ruling party tensions that have put South Africa's investment grade at risk.
It goes on to explain the cost of government's borrowing needs is influenced by how investors perceive South Africa.
The country's chief prosecutor had previously been pursuing a fraud case against Gordhan in October 2016, but the charges were dropped after three weeks.
Sahara Computers, owned by friends of Zuma, the Guptas, filed an application demanding that Gordhan be present in court on Tuesday for a hearing on whether the minister can be forced to order banks to reopen bank accounts of companies associated with the family.
The global rating agency Moody's will update their view of South Africa's credit rating April 7.
"The president is my boss so if he asks us to come back, we come back", Gordhan said. The rating is still above "junk", but a threat of economic chaos following the recent wave of political turmoil might render both investors and rating agencies even more skeptical of the economic prospects of South Africa.