Protest in UK over Gordhan axing

Cape Town - The first bit of internal diplomatic fallout over the dismissal of Finance Minister Pravin Gordhan and his deputy Mcibisi Jonas arrived on Friday on the desk of Obed Mhlaba, high commissioner to the United Kingdom. It came from the honorary consul for the East of England, Anne Page.

In a letter copied to other honorary consuls, she noted that “it has been hard enough to defend the Zuma presidency in recent times”. She adds that it will now be “nigh impossible to persuade newcomers to put their business and money in that (South Africa’s) direction".

Page adds that in her view Gordhan “has eased international misgivings about the national direction, and improved the fiscal position”. The fact that he and Jonas were dismissed cannot pass without her expressing “intense anxiety”. She asks the high commissioner to find a way to let the government know of her “one modest comment”.

READ: Pravin Gordhan: Our souls are not for sale 

Her reaction comes after President Jacob Zuma reshuffled his Cabinet overnight, removing among others Gordhan and Jonas. 

Gordhan was replaced with Home Affairs Minister Malusi Gigaba, while Jonas' position will from now on be filled by Sfiso Buthelezi, former businessman and fund manager and currently an ANC MP who has served on the standing committee on finance. 

The rand initially dipped below R13.00 against the dollar in Thursday’s trade. Once the news of Gordhan's axing was known, the rand hit R13.45 to reach a high of R13.62 on Friday morning.

READ: Gordhan axing: why the rand is remarkably calm 

Later on Friday morning the rand was trading below R13.50 against the greenback while the bond market has seen the 10-year bond yield peak at 9% Thursday - up from 8.3% a week ago. Local markets opened weaker, weighed down by financials that were down by over 3% in the first hour of trading.

By early afternoon on Friday the rand was down 4.07% to R13.38.

Investors on the JSE on Friday however started to get rid of stocks with big exposure to the South African economy and fled towards rand hedge shares, which earn most of their income abroad. Share prices of South African’s top four banks plunged more than 5% in early trade.