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Blue Monday for Gordhan and SA on April 3?

Johannesburg - The ANC's top six officials will meet with President Jacob Zuma in the coming days over his intention to sack Finance Minister Pravin Gordhan, says a person with knowledge of the matter.

Zuma told the top six leaders in a meeting on Monday that he wanted to dismiss Gordhan because he was aiming to undermine the president in meetings with investors while on a roadshow in the UK and US, the person with knowledge of what happened at the gathering said. Zuma had ordered Gordhan to cancel the roadshow and return home from London, causing the rand to plummet.

The officials included Deputy President Cyril Ramaphosa, secretary general Gwede Mantashe and treasurer general Zweli Mkhize, according to the person, who asked not to be identified because a public statement hasn’t been made. The six officials agreed to meet again on April 3 to discuss the issue, according to the person.

Risking a market meltdown

If he fires Gordhan, Zuma risks a market meltdown and a revolt by opponents in the ruling party. If he doesn’t, he may appear weak as he seeks to secure his choice as successor as party leader in December. Zuma told members of the group that Gordhan is divisive in the cabinet and thwarts efforts by other ministers to deliver services, according to the person.

“Zuma is still very hesitant whether he can remove the finance minister,” Dirk Kotze, a politics professor at the University of South Africa in the capital, Pretoria, said by phone. “Once he kicks out Pravin Gordhan, there can be sympathy resignations and he doesn’t know how to predict that. Will it be Ramaphosa plus six, seven, eight, nine other ministers?”

The rand reversed losses on Wednesday after the report on opposition to Gordhan’s dismissal. The currency gained as much as 0.8% against the dollar after being 1.3% weaker before the report.

The right to hire and fire

As president, Zuma has the right to fire and appoint ministers at any time and doesn’t need the approval of the party’s top six leaders, which include chairperson Baleka Mbete and deputy secretary general Jessie Duarte. Bongani Ngqulunga, Zuma’s spokesperson, didn’t answer calls to his mobile phone.

Zuma told the officials that he favoured Brian Molefe, the former head of the state power company, as a replacement for Gordhan, according to the person. Molefe resigned from Eskom in November after being implicated in a report by the Public Protector for favouring members of the Gupta family, who are in business with Zuma’s son, in awarding contracts. Molefe denied wrongdoing and Zuma has challenged the findings of this.

Gordhan feud

Zuma was pressured to appoint Gordhan in 2015 after a decision to name a little-known lawmaker to the position caused the rand and bonds to plunge. Since then, he’s feuded with his minister over a planned nuclear power expansion and the management of state companies and the national tax agency.

According to the person, Zuma showed the leaders an intelligence report, seen by Bloomberg, stating that the Ministry of Finance and the National Treasury stand together against the president, and that Gordhan and his deputy, Mcebisi Jonas, had set up secret meetings to start what is called 'Operation Check Mate' to undermine Zuma.

Ramaphosa, Mantashe and Mkhize dismissed the findings and said they reserved the right to publicly oppose any decision to fire Gordhan, the person said.

Treasury spokesperson Yolisa Tyantsi didn’t immediately respond to a phone call and text message seeking comment.

“Gordhan is well-respected by virtually everyone bar the president and his supporters,” said Ruth Bookbinder, an Africa analyst at Bath, England-based risk consulting firm Verisk Maplecroft.

“The president is unable to sack Gordhan without risking his own position. The latest spat between the two men suggests that Zuma is trying to make Gordhan’s position untenable. Unable to fire the minister, Zuma hopes to push Gordhan into resigning.”

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