Ratings agencies aware of SA politics: Gordhan

Finance Minister Pravin Gordhan warned that ratings agencies factor in South Africa’s current political turmoil when reviewing its credit rating.

A fresh bid to remove president Jacob Zuma from office failed in Parliament on Tuesday, with the opposition defeated by 233 votes to 143, with no abstentions.

The motion to impeach Zuma was tabled following a Constitutional Court ruling made last week, which found that the president to violated upholding the constitution by failing to abide by the public protector’s remedial action on his private residence at Nkandla.

Zuma apologised to the nation for the whole saga, but defended his actions, saying that he was not aware he had violated the constitution.

Among those who voted to keep the president in power on Tuesday, was the finance minister himself, while a former finance minister, Trevor Manuel called for the president to be recalled in an interview with the Sowetan.

The rand softened to R15 against the dollar minutes after the vote was announced. At 09h40 on Wednesday the local unit traded at R15.04 against the buck, R21.24 versus the British Pound, and R17.08 against the euro.

“Politics, economics and the fiscal situation are all things ratings agencies watch out for. South Africans should be aware of that,” the financial head told Reuters on Tuesday.

South Africa’s Gross Domestic Product (GDP) is expected to come in at 0.9 % in 2016, down from 1.3% in 2015, reflecting the impact of the current drought and depressed global conditions, Gordhan warned in February.

Nkandla is not the only scandal the president has hanging over his head. A number of senior ANC figures have come forward in recent weeks with allegations of an attempt at stet capture by Zuma’s close friends, the Gupta family.

Reuters notes that Standard & Poor’s and Fitch rate South Africa’s debt just one notch above junk status, while Moody’s has it two notches above junk, but on review for a downgrade. Representatives from the latter company visited the country last month during the height of the Gupta scandal.

Jackson Mthembu, chief whip of the ANC warned on Tuesday that the reputation of the ruling party has been harmed by the fallout from the ConCourt’s rulling on Zuma.

“There has been damage on the part of the ANC. We need to go down on the ground and explain exactly what happened. We still have a lot to do,” Mthembu said.

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Ratings agencies aware of SA politics: Gordhan