Coovadia: Firing of Gordhan not a political issue | Fin24
  • Covid-19 Money Hub

    The hub will help answer your business and money questions during the coronavirus crisis.

  • The R450bn Question

    The Covid-19 crisis has delayed finding a solution for Eskom's debt, says Pravin Gordhan.

  • Public Investment Corp.

    The asset manager's new head Abel Sithole faces a long to-do list from workers and business.


Coovadia: Firing of Gordhan not a political issue

Mar 31 2017 21:23
Carin Smith

Cape Town - The firing of former finance minister Pravin Gordhan is not a political issue, but a national one, Cas Coovadia, chair of the Banking Association of SA (BASA) and part of the CEO Initiative, told Fin24 on Friday.

"Capable ministers and deputy ministers are being removed based on unintelligible intelligence reports, while some ministers who courts declared are not doing their work are retained. Then we have to ask why and what the impact will be," said Coovadia.

He pointed out that Gordan had said at a press conference earlier on Friday that South Africa is at a junction where there are forces at play that don't appear to have national interests on the agenda.

"When Gordhan was supposed to appear in court all of society mobilised to support him, including business sector. It is, therefore, with a great deal of sadness that I say this: it is in the national interest to ask questions and the president must explain why he has done [the Cabinet shuffle], why he has done it in the way he has and how he will address the negative impact on our nation," said Coovadia.

READ: Gupta-linked Vardospan loses 11th-hour court bid to buy Habib Bank

At the same time, he said the different constituent bodies in business will obviously want to meet with the new finance minister and deputy minister of finance and talk about the way forward.

As for the banking industry specifically, Coovadia said it still has a lot of work to do if SA wants to keep its leading position in the banking industry.

"We hope the new minister of finance will liaise with us to avoid a downgrade. As business we want to continue with a positive message about SA to get investment going," said Coovadia.

In response to a question by Fin24 about the Habib Bank issue, Coovadia said he cannot comment. He did add, though that to obtain a banking licence, a regulatory process must be followed, which could take up to four years.

"It takes time and must meet the requirements. We would not want the SA Reserve Bank (SARB) or Treasury to compromise and the public needs to understand this," he said.

In a statement issued on Friday the CEO Initiative, formed by leaders from various sectors, said it is gravely concerned and disappointed "by the ill-timed and irrational dismissal of a trusted and well-respected minister of finance and deputy finance minister".

READ: Gordhan axing: Why the rand is remarkably calm

"This decision, and the manner in which it was taken, is likely to cause severe damage to an economy that is in dire need of growth and jobs. The rationale for the removal of other ministers in key departments at a time when the country is beginning to make progress on a number of fronts is also questionable," the organisation said.
"If investors lose faith and trust in our economy, all citizens – not just big business – pay the price for this, in the form of higher inflation, decreased buying power as well as decimated savings, pensions and investments. A lack of investment also means that growth – and much-needed job-creation – will be stifled."
More than a year ago – at the request of President Jacob Zuma, Deputy President Cyril Ramaphosa and the South African government as a whole – representatives from government, labour and business started working together with unprecedented urgency. Their goal was to achieve inclusive and sustainable growth, for the benefit of all who live in South Africa.
"We maintain this is the most responsible and sustainable way of achieving true economic transformation. The dismissal of Pravin Gordhan as minister of finance and his deputy creates a high risk of derailing any progress that has been achieved in this regard and will deal a serious blow to the economy at a time when the country can ill afford this," said the CEO Initiative.
"Commitment to fiscal discipline is of the utmost importance if we are to protect the economy from outside shocks and maintain an investment grade credit rating."

Read Fin24's top stories trending on Twitter:



Company Snapshot

Voting Booth

How has Covid-19 impacted your financial position?

Previous results · Suggest a vote