The reappointment of Pravin Gordhan as finance minister late on Sunday has left many a South African speechless, with several analysts reckoning it’s the beginning of the end for President Jacob Zuma.<\/p>\n
“Well, I am speechless again,” said independent treasury specialist Adam Phillips of Umkhulu Consulting on Monday.<\/p>\n
In a shock move David van Rooyen, a relatively unknown ANC MP, was abruptly appointed to replace Nhlanhla Nene. But he had hardly sat down in the hot seat when he was replaced by Nene’s predecessor, Pravin Gordhan.<\/p>\n
“In my opinion this is the beginning of the end for Zuma. He has bowed to pressure from within his own party and that surely cannot be good for him,” said Phillips.<\/p>\n
One of SA’s leading economists, Dawie Roodt, didn’t mince his words when he called for a “disgraced” Zuma to step down.<\/p>\n
\u201cThis is a mess-up of epic proportions. It is like we\u2019re living in Alice in Wonderland.<\/p>\n
\u201cI can\u2019t see how on earth Zuma is going to survive as president of South Africa. He must go. He is a disgrace,\u201d charged Roodt.<\/p>\n
Phillips said with anti-Zuma demonstrations scheduled for Wednesday, anything could happen. The turnout for these demonstrations might lead the ANC to think about recalling Zuma, he said.<\/p>\n
Economist Mike Schussler of economists.co.za said the Gordhan announcement came as a surprise, but now he “believes Zuma is weak and (SAA chairperson) Dudu (Myeni) will go”.<\/p>\n
The SAA Airbus saga was widely rumoured as one of the main reasons for Nene’s deployment to the Brics Development Bank.<\/p>\n
“These quick changes show how vunerable we are and how much the minister is worth. Every economist in town – in the private or even public sector – will tell you we have been lucky with the finance ministers we have had. It WAS a strong point.<\/p>\n
“Now people will think: what if this happens again, or what if they appoint a person who just takes away, etc,” said Schussler.<\/p>\n
“Thank the Lord for this. Gordhan and all the others (before Des), I am proud to say, have been the strong point of SA economic policy,” Schussler said.<\/p>\n
Attempt to avoid junk status<\/strong><\/p>\n MMI economist Sanisha Packirisamy viewed Zuma\u2019s latest decision to reappoint Gordhan as the potential for a reinstatement of fiscal discipline and an effort to prevent a further sovereign rating downgrade. This way, SA can avoid the higher borrowing costs associated with junk status.<\/p>\n “Although the reversal of the controversial decision – to replace the widely-respected Nene with the relatively unknown Van Rooyen – should see some stabilisation in investor sentiment and market prices, local and global investors will continue to question government\u2019s process of decision-making, which has created further ambiguity around economic policy in an already fragile growth environment.”<\/p>\n Fin24 user Ryk van Jaarsveld quoted Oliver Cromwell’s advice to King Charles I as “very good advice for Zuma”: “You have sat too long for any good you have been doing lately… Depart, I say; and let us have done with you. In the name of God, go!”<\/p>\n On the rand’s expected reaction to the cabinet re-reshuffle, Phillips said he thinks it is important not to view it in the same way as in 2001.<\/p>\n “Then, we went from R9.00\/$ (in) October to R14.00 (on) 21 December. We then retraced back to R11.00 by 31 December. Then we had Mbeki in charge, but did not have a rating. If Pravin can protect that rating, then he might be seen in the same light as Trevor Manuel.<\/p>\n Gordhan must tell it like it is<\/p>\n “To do that he has to tighten government spending and look at the SAA and nuclear deals. He has to be his own man and tell it to Zuma like it is. I still think Zuma’s days are numbered and I hope the numbers that demonstrate on Wednesday will leave him with no alternative.”<\/p>\n Phillips expects the rand to move below R15.00\/$ but cautioned there will be some support from importers, and that the US Federal Reserve decision later this week will play its part.<\/p>\n “If (chair Janet) Yellen says ‘don’t expect another cut for a while’ then emerging market currencies could appreciate. There are too many buts and markets don’t like that.”<\/p>\n The rand did move briefly below R15.00 to R14.94 in overnight trade, but has been trading in a broad range between R14.9420 and R15.8847. It was last trading 5.03% firmer at R15.09 from Friday’s close of R15.89.<\/p>\n Fin24<\/a><\/p>\n Pravin Gordhan appointed new minister of finance<\/a><\/strong><\/p>\n Rand in recovery after return of Pravin Gordhan<\/a><\/strong><\/p>\nMore on markets in SA<\/h3>\n