Johannesburg – The removal of Finance Minister Pravin Gordhan is unlikely, as President Jacob Zuma will be mindful of any “negative blowback” from the ANC, said an analyst from consultancy company Eurasia Group.
There has been speculation that a Cabinet reshuffle is on the cards and that Gordhan might be removed from his post, following reports that Zuma ordered the minister and his deputy Mcebisi Jonas to withdraw from an international investor roadshow scheduled to take place in the UK and US this week.
Gordhan, who was already on the UK leg of the roadshow will arrive back in South Africa tomorrow, while Jonas, who was set to fly to the US later, will not leave the country, Treasury said in a statement.
The rand weakened from R12.36/$ to R12.67/$ almost immediately following the initial reports and fort a while stabilised at around R12.60 to the greenback.
The currency later buckled under pressure to hit an intra-day high of R12.82 and by 17:09 the local unit was trading at R12.74/$.
READ: Treasury confirms: Gordhan flying back to SA tonight
Darias Jonker, director for Africa explained that Gordhan’s removal was unlikely with the National Executive Committee (NEC) being divided on the Zuma/Gordhan battle.
“As part of his attempt to undermine Gordhan despite being unable to remove him, a more assertive Zuma is thus even more likely to elevate Brian Molefe, the former Eskom CEO, to the position of deputy minister of finance or minister of energy or minister of public enterprises,” he said.
Reports allege the roadshow was not preapproved by Zuma, which could be used to build a case against both Gordhan and Zuma. “In this situation a Cabinet reshuffle where Zuma removes at least one of his opponents (probably Jonas) becomes more likely,” he said.
In the event that the roadshow indeed was not preapproved, then Zuma could use this as part of a plan to justify removing Gordhan, added Jonker.
READ: Dramatic shift in Gordhan's risk of getting the chop – economist
Nomura’s emerging market economist, Peter Attard Montalto said that the chances of Gordhan being removed are higher. He expects Molefe to either take Gordhan’s place, or that of Jonas.
Montalto previously said that there was a 60% chance of a Cabinet reshuffle, within the second half of March.
ALSO READ: Zuma joins Gupta court battle to file motion against bank
This comes a day before a matter between Gordhan and Gupta-owned Oakbay Investments is to be heard at the North Gauteng High Court.
Gordhan is seeking a declaratory order to protect the Treasury’s executive from having to intervene in the closure of the Guptas’ bank accounts by the country’s top four banks.
Fin24 reported that Zuma joined court proceedings on Monday. The rand subsequently breached the R12.80/$ mark.
Zuma’s court intervention is with regards to Standard Bank’s extended declaratory order against Zuma and all members of the Cabinet, which it included in its responding affidavit.
The state attorney said Zuma was added to Standard Bank’s responding affidavit “in circumstances where the president and no members of the Cabinet other than the minister of finance are parties to the proceedings”.
In its papers filed on 13 December 2016, Standard Bank asked the court to prevent Zuma and any of his ministers from intervening in its decision to close company accounts associated with Oakbay.
The rand was trading at R12.75/$ at 17:17.