Zuma ignores junk status, praises Gordhan's maturity | Fin24
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Zuma ignores junk status, praises Gordhan's maturity

Apr 04 2017 12:18

Cape Town – President Jacob Zuma remained defiant regarding his Cabinet reshuffle, despite the country’s sovereign rating downgrade to junk status on Monday.

Standard & Poor's blamed Zuma’s reshuffle directly on Monday when they announced their decision to downgrade South Africa to junk status, or non-investment grade, a drastic move that will have a negative impact the country’s inflation, interest rates, markets and the local currency. Moody’s also moved South African to downgrade review on Monday.

Speaking at the Transnet’s Trans Africa locomotive launch on Tuesday, Zuma extended his “gratitude and appreciation” to Gordhan and former finance minister Mcebisi Jonas for “their contribution to strengthening the National Treasury and the Finance portfolio”.

Zuma praised Gordhan and Jonas for “ensuring a smooth transition” at Treasury.

“Mr Gordhan is officially handing over to Minister Malusi Gigaba this morning,” he said. “This shows the maturity of leadership within the governing party. We appreciate the determination by both leaders to ensure continuity and unity within the portfolio.”

“A united and stable National Treasury and Finance portfolio as a whole is absolutely critical for government and the country.”

Zuma under attack

Zuma has come under intense criticism from the African National Congress leadership for the duo’s removal, while alliance partners Cosatu and the South African Communist Party have called on him to resign.

Three of the ANC’s top six leaders stepped out to criticise Zuma as the battle for the party’s leadership heats up ahead of the December 2017 elective congress.

Deputy President Cyril Ramaphosa said it is “totally unacceptable that he fired someone like Gordhan, who has served the country excellently, for his own gain and survival”.

ANC treasurer general Zweli Mkhize said the briefing by Zuma on the changes left an impression that "the party was no longer at the centre".

ANC secretary general Gwede Mantashe said the president's list of new appointments seem to have come from "elsewhere".

The ANC national working committee will meet on Tuesday, following the ANC’s top six – which included the above three – on Monday.

Protests and occupy movements - such as Save SA - have also started gathering momentum regarding Zuma's recall of Gordhan.

Zuma responded to these attacks on Tuesday, saying: “We know that public statements which indicate disagreements within government by ministers for example, demoralise our people and create confusion.”

Zuma remains defiant on reshuffle

Remaining defiant in his midnight decision last Thursday, Zuma said the changes will “add renewed energy into Cabinet and the executive as a whole”.

“We are proud of having added many young ministers which is an investment into the future of government leadership.

“If we do not enable our young MPs to gain experience now, we may battle in future with leadership and governance experience within the national executive. We congratulate all new appointees once again.”

Desperate to keep other rating agencies from downgrading South Africa, Zuma pledged to retain Treasury’s fiscal and expenditure policy.

“We reiterate that while the political leadership has changed, government’s overall policy orientation remains the same as derived from the governing party, the African National Congress.

“We also wish to emphasise that Government has been, and will remain, committed to a measured fiscal consolidation that stabilises the rise in public debt.

“We extend our gratitude and appreciation to Minister Pravin Gordhan and Deputy Minister Mcebisi Jonas for their contribution to strengthening the National Treasury and the Finance portfolio.”

Zuma seeks unity and peace

Zuma said he directed Gigaba and deputy Finance minister Sfiso Buthelezi to “immediately prioritise unity, peace, cohesion and stability within the finance portfolio”.

“This will enable all components of the portfolio to focus on the tasks at hand,” he said. “It is also more important than ever now that we unite as a country and work together in light of the unrelenting socio-economic challenges that we face.”

Zuma also pledged that Treasury will “continue to work with business and labour to take forward the work of the CEO Initiative that was established last year to reignite growth, while also strengthening the Presidential Business Working Group where we interact with all components of business”.  

“Minister Gigaba and his team will also be reaching out to the international investor community urgently to assure them that South Africa remains a stable, reliable and competitive investment destination. They will build on the good work that has been done thus far.

“Most importantly, we assure our people that government will do everything possible to promote cohesion, unity and efficiency in government.

“We have also stated that we need to re-focus and reprioritise in order to radically transform our economy, as decided by the governing party in 2012.

“We thus remain firm in our call that the economy needs to include the black majority in the ownership and control, so that we can have sustainability into the future.

“We will work with the private sector and labour to achieve the goals of meaningful radical economic transformation, including state owned enterprises like Transnet.”

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