President Jacob Zuma fired Minister Pravin Gordhan last night. Zuma held an emergency meeting at his residential home where he announced the reshuffling of his cabinet along with the ousting of several ministers.
This political reshuffling has removed the stalwart guardian of treasury: Pravin Gordhan. Now ex-minister, Pravin Gordhan was the last barrier to Zuma’s rumoured state capture plans. Zuma has ousted Gordhan against the advice of senior ANC leaders; big business; his allies in Cosatu (Congress of South African Trade Unions); the SACP (South African Communist Party); and investors.
The ANC has expressed dissatisfaction with President Jacob Zuma's cabinet reshuffle. #SABCNews
— SAfm news (@SAfmnews) March 31, 2017
This marks a turning point for both the ANC and the country as a whole. His replacement, ex-Minister of Home Affairs Malusi Gigaba has been widely seen as a final successful attempt at Zuma gaining influence into the treasury. Minister of Finance Malusi Gigaba has long been a loyal Zuma follower and his placement exhibits complete overarching political control of the Treasury. Zuma finally has a compliant follower in charge of the fiscus and this is dangerous to the markets and potential investors.
The economic effects of the firing of Gordhan means a potential downgrade is expected in the following weeks. Meaning borrowing will become far more expensive and the fiscus will have to rely on debt to fund social programmes. The poor will be hardest hit by the reshuffle and market effects.
The rand has – at the time of writing – extended its decline following the announcement of the cabinet reshuffle. The markets have long respected Gordhan for doing an almost impossible job, holding South Africa from drowning. With his dismissal, the raised eyebrows looking at South Africa have turned into frowns and the treasury’s credibility is lost.
— Sipho Kings (@SiphoMcD) March 31, 2017
In response to the Cabinet reshuffle, various ANC spokesmen/spokeswomen have come out to defend President Zuma’s actions as constitutionally valid and within the powers of the executive branch. While it is true the President may reshuffle cabinet members it is not the formal requirements under scrutiny, it is substantive in the effects and timing of the Presidential prerogative is going to damage the country. The ANC is a divided party on the Gordhan matter, which is clear from senior members’ expressions and public statements. While hypocrisy is a sin is forgivable in politics, the ANC communications branch must be careful to hide Zuma behind a Constitution he has been in breach of.
South Africa is going to become an expensive place to live in. With the poor and middle class being the ones hardest hit by the market effects of Zuma’s rash actions, we as the electorate should hope the ANC leadership returns to their 1994 ethos of the ‘people’s party’ rather than a party for and in their own interests.
As Advocate Thuli Madonsela tweeted this morning, “It is said that businesses that die are murdered by their own leaders. The same applies to organisations and democracies.”
It is said that most businesses that die are murdered by their own leaders. The same applies to organisations and democracies
— Adv Thuli Madonsela (@ThuliMadonsela3) March 31, 2017
Image sourced from the Daily Maverick.