SA's credibility hinges on no-confidence vote in Zuma - Fedusa | Fin24
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SA's credibility hinges on no-confidence vote in Zuma - Fedusa

Apr 10 2017 17:35
Liesl Peyper

Cape Town – A successful no confidence-motion in Parliament that may unseat President Jacob Zuma could restore South Africa’s ratings credibility, said the Federation of Unions of South Africa (Fedusa) in a statement on Monday.

On Tuesday April 18 during a special sitting of the National Assembly members of Parliament will debate and vote on the ninth motion of no confidence since Zuma has become President in 2009. 

The previous motions were among other things as a result of exorbitant security upgrades to Zuma’s homestead in Nkandla, his firing of Nhlanhla Nene as finance minister and his closeness with the Gupta family. The President easily survived all these motions as ANC MPs toed the party line. 

Opposition parties, which requested National Assembly Speaker Baleka Mbete to schedule the no confidence-motion, do not have enough votes to unseat Zuma and will therefore require support from ANC ranks.

“Therefore the focus shifts to the ANC parliamentary caucus to see if it will back Zuma and his new cabinet,” Fedusa said in its statement. 

For a no-confidence motion to succeed, 201 votes (50% plus one of total membership) must vote in favour of the motion. 

READ: Zuma survives and emerges stronger - economist 

“It would be interesting to see how the representatives of the SACP would vote because they called on Zuma to resign and marched with labour federations, trade unions, political parties, churches, religious organisations and students," Fedusa said. "Members of the South African Communist Party (SACP) could help South Africa to restore credibility if the motion of no confidence is concluded in Parliament. 

According to Fedusa, South Africa will need a government of national unity, which is committed, credible, and capable of restoring the confidence of investors and ratings agencies.” 

Economic backlash

Calls for Zuma to resign have intensified during the past two weeks, which started when the President ordered former finance minister Pravin Gordhan and a delegation from National Treasury to return from an international investor roadshow on Monday March 27. 

Three days later, Zuma reshuffled his cabinet, removing Gordhan and his deputy Mcebisi Jonas among others. 

READ: Cabinet reshuffle, downgrade knock rand's emerging markets crown 

The rand has since lost 10% of its value and South Africa’s credit rating has since been slashed to sub-investment grade by two ratings agencies – Standard & Poor’s (S&P) Global Ratings and Fitch Ratings. Both agencies cited the Cabinet reshuffle and a likely change in policy direction as reasons for their decisions. 

Fedusa said in its statement the “irresponsible and disastrous” reshuffle caused the six-member bank index to decline by over 10%, resulting in a loss of R61bn.

Before the credit downgrade, Fedusa said, Gordhan estimated that government would spend R169bn on debt repayments in 2017 at a rate of 10.5% each year. 

“The weak rand will have an effect on the cost of petrol and imported food, as workers are paying more for transport and food, putting further pressure on workers’ finances.” 

READ: Junk status: Hard times ahead for consumers 

The South African Reserve Bank’s (SARB) monetary policy committee will in all likelihood raise interest rates at its next meeting as a result of higher inflation, which in turn would mean higher mortgage and car loan repayments, Fedusa said. 

“Workers will be forced to spend more money on food, transport and interest payments, leaving less money available for people to help their extended unemployed families.” 

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