South Africa’s president sacks the finance minister in a cabinet reshuffle

JACOB ZUMA waited until the dead of night to tell South Africans that he had fired their respected finance minister. Rumours of a cabinet reshuffle had been swirling for months. Finally, in a press statement released just after midnight, President Zuma announced that he was shuffling 20 posts in his cabinet including the axing of Finance Minister Pravin Gordhan as well as his deputy, Mcebisi Jonas.

The potential fallout of removing Mr Gordhan had been clear for some time. Each time it seemed likely that Mr Zuma, a president facing 783 corruption charges, was preparing to prise Mr Gordhan’s hands from the purse strings, the rand would wilt and investors would dump South Africa’s bonds. Well before the move, senior members of Mr Zuma’s party, the ruling African National Congress (ANC) were speaking out in support of Mr Gordhan, and business leaders were sounding warnings that South Africa’s credit rating could be cut to junk. Despite all of this, Mr Zuma’s dislike of Mr Gordhan and his deputy was so great that he sacked them anyway, consequences be damned.

And indeed the consequences are damning. Within hours the rand slumped, taking it down almost 7%...Continue reading