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Rand rout as Malusi Gigaba takes reins at Treasury

Mar 30 2017 23:47
Sam Mkokeli, Bloomberg News

Johannesburg - President Jacob Zuma fired Finance Minister Pravin Gordhan and replaced him with Home Affairs Minister Malusi Gigaba, two people familiar with the decision said, declining to be identified because an announcement hasn’t been made. The rand weakened.

Zuma will make an announcement relating to changes to the National Executive later on Thursday, the Presidency said in emailed statement. He told senior ruling party leaders earlier this week of his plans and was opposed by three of the top six officals. Broadcaster eNCA also reported that Gordhan has been dismissed.

READ: Rand falls through R13.30/$ as Zuma replaces Gordhan

The dismissal late on Thursday came after a meeting of the top six members of the ruling African National Congress at Zuma’s private residence in Pretoria, the capital. It capped a dramatic week when Zuma ordered Gordhan on March 27 to cancel a series of meetings with investors in the UK and the US and return home. The president told the senior ANC members this week that intelligence reports suggested Gordhan was trying to undermine his authority.

His dismissal marked the end of a stormy relationship that began almost as soon as Zuma named Gordhan, 67, as finance minister in December 2015, four days after he triggered a sell-off in the rand by giving the post to a little-known lawmaker. Gordhan’s efforts to keep spending in check and protect South Africa’s investment-grade credit rating endeared him to investors. Yet he clashed with his boss over the affordability of building nuclear power plants and the management of state-owned companies.

The rand extended its decline, falling to the weakest level against the dollar since March 10. The currency weakened to R13.41/$ by 23:42.

Zuma is due to step down as ANC leader in December and as president in 2019. With the party continuing to dominate South African politics 23 years after it came to power in the nation’s first multiracial elections, the party’s next leader will probably also become South Africa’s next president.

Nkosazana Dlamini-Zuma, the former chairperson of the African Union Commission, and Deputy President Cyril Ramaphosa are seen as the frontrunners for the post. Zuma’s comments that the ANC is ready for a woman leader have been widely seen as an endorsement for his ex-wife.

pravin gordhan  |  jacob zuma  |  malusi gigaba
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