Johannesburg – Even though the Cabinet reshuffle caused damage to the economy, the Federation of Trade Unions South Africa (Fedusa) intends to work together with the new finance minister.
This is according to the federation’s general secretary Dennis George. He spoke to Fin24 following a meeting with the new Finance Minister Malusi Gigaba, his deputy Sfiso Buthelezi and the Deputy President Cyril Ramaphosa at the National Economic Development and Labour Council (Nedlac) offices in Rosebank.
Fedusa was meant to have a media briefing following the meeting, but this was called off by the deputy president. When Fin24 spoke to George about this, he said he was equally surprised to find that there were no journalists at Nedlac following the meeting and had no knowledge of the cancellation.
Fedusa met with Treasury’s leadership and the deputy president to discuss a way forward for social partners following the Cabinet reshuffle and the downgrade to junk status, explained George.
“From our side we criticised the Cabinet reshuffle,” said George. When asked if Gigaba’s appointment could have been handled better, he said yes.
The Cabinet reshuffle had caused “damage” to the economy, explained George. Ratings agencies Standard & Poor’s (S&P) and Fitch downgraded South Africa to junk status over concerns that a change in leadership would result in policy uncertainty. Ratings agency Moody’s, which has South Africa rated two notches above junk status, has placed the country on review for a downgrade.
READ: Cabinet reshuffle, downgrade knock rand's emerging markets crown
This saw the rand, the leading emerging market currency, losing more than 10% of its value given the political events over the past two weeks.
Analysts also expect business and consumer confidence to take a knock, further dampening economic growth prospects, as more jobs are expected to be shed.
Among the issues discussed in the meeting, George said a task team was established. Job creation for young people will remain a key focus area as well as the establishment of township entrepreneurship and agricultural entrepreneurship programmes to ensure access to the economy.
He added that labour and other social partners will also play a bigger role in the Budget review process to ensure transformation of the economy through the implementation of structural reforms.
“We are looking forward to working with the new minister of finance,” said George.
George said he is yet to discuss with Gigaba, Treasury’s upcoming trip to the US where the department will join the International Monetary Fund/World Bank Spring meetings. Gigaba will also be meeting with international investors, according to a statement issued by Treasury.
George was meant to accompany Gigaba's predecessor Gordhan for an investor road show in London, but this did not materialise after President Jacob Zuma ordered the former finance minister to return to South Africa. This stirred speculation of a possible Cabinet reshuffle.
George said this was a “bad” of leadership to do especially at a time when different social partners were working on important projects.
Fedusa previously said the removal of Gordhan indicates that the process of total state capture is firmly set in motion.
READ: Gordhan axing intensifies ‘total state capture’ notion – Fedusa
George said the federation was “deeply disappointed and outraged” by the way the Cabinet reshuffle was handled. The federation called for the resignation of President Jacob Zuma. Fedusa has thrown its weight behind a vote of no confidence against the president, which will be heard in Parliament on April 18.
George said Zuma did not learn a lesson from December 9 2015, when he appointed an unknown MP as finance minister. “The timing of the axing of Gordhan and the manner in which it has been done couldn’t have come at a worse time for our country,” he said.
READ: Pityana: Zuma kicked business and labour in the teeth
Businessman and leader of campaign Save South Africa Sipho Pityana told Fin24 there would be “strong debate” among business and labour on whether to support a new investor roadshow.
Pityana explained that when President Jacob Zuma recalled Gordhan and Jonas, it was a "kick in the teeth" for business and labour representatives who accompanied Gordhan on his trip.Read Fin24's top stories trending on Twitter: