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Johannesburg – President Jacob Zuma’s latest Cabinet reshuffle does little to inspire much needed business confidence and is undermining economic growth prospects, said Business Unity South Africa (BUSA).
On Tuesday Zuma reshuffled his Cabinet for the second time in less than seven months and for the 11th time since he took office eight years ago. The moves included new ministers for the departments of energy, home affairs, telecommunications, higher education and state security.
The rand subsequently lost more than 1% to R13.45/$ and was trading at R13.43 by 15:49, from an overnight close of R13.31 and an intra-day low of R13.29 to the greenback.
BUSA noted that the affected departments are “directly relevant” to the work BUSA is engaged with.
“Stability and certainty are a pre-requisite for business confidence, translating directly into the country’s economic growth potential,” said CEO Tanya Cohen.
“Political and economic stability is required to ignite inclusive economic growth and generate much-needed employment and revenue to pursue our social goals. This latest reshuffle further undermines prospects for South Africa’s growth.”
BUSA also pointed out the significance of the move in the Department of Energy (DoE). Former Minister Mmamoloko Kubayi has been moved to communications, while David Mahlobo from state security is now energy minister.
This reflects the lack of stability in the energy sector, considering that Eskom does not have a permanent CEO and board chairperson, and persistent issues around the central energy fund portfolio.
“The change in minister may well take the country back another step in this regard, thereby delaying the finalisation of a sustainable and affordable energy solution for the country,” the statement read.
Solly Moeng, brand reputation management adviser, is of the view that Kubayi was moved because of growing impatience and frustration at the pace she was dealing with the nuclear matter.
“We also know that there is more urgent appetite to go ahead with the nuclear new build process under the Jacob Zuma presidency than there will probably be under a successor, especially if that successor will not be Dr Nkosazana Dlamini-Zuma,” he said.
Moeng suggested that Mahlobo could move the process forward.
But economic strategist Thabi Leoka said that it is too soon to assume that moves were made to support nuclear plans and that a “wait and see” approach should be taken.
“We need to find out more about him [Mahlobo], right now there are more questions than answers.”
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