- South Africa’s Currency Plunges After President Zuma Fires Minister
South Africa’s rand dipped as much as 4 percent on Thursday following President Jacob Zuma decision to named Malusi Gigaba to replace Pravin Gordhan as the new finance minister.
The president in a statement issued on Thursday said, “I have directed the new ministers and deputy ministers to work tirelessly with their colleagues to bring about radical socio-economic transformation and to ensure that the promise of a better life for the poor and the working class becomes a reality.”
Earlier this week, President Zuma recalled Mr Gordhan from planned events in the UK. Leading to speculations and uncertainty in the South Africa markets.
Analysts have warned that firing Gordhan and other key cabinet ministers could worsen economic outlook and plunge further the already weak business confidence.
“This would be the worst outcome for markets over both the short and medium term,” John Ashbourne, Africa economist at Capital Economics, wrote in a research note on Wednesday. He warned it’s likely to worsen tensions within the governing party, the African National Congress.
Over the year, Gordhan has built a reputation as a steady hand who carefully guide South Africa’s economy and encourage both foreign and local investors to invest in growing South Africa.
Gordhan first became South Africa’s finance minister in 2009 and served until 2014. He was later recalled in 2015 to help rescue the economy following the drop in global commodity prices.
Since Gordhan was recalled on Monday, the rand has plunged 7 percent to 13.41 against the US dollar.
