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President Zuma fires Finance Minister, sending the Rand tumbling - Alldamoney

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President Zuma fires Finance Minister, sending the Rand tumbling


Investors fear over Gordhan's job security was confirmed on Monday when President Jacob Zuma removed his experienced finance minister, plunging the country into a new round of political turbulence.


Pravin Gordhan, was ordered to return home and cancel a series of meetings lined up with foreign investors. That move hit the South African Rand, sending it down to about 8% since the start of the week as investors anticipated a sack from the president.


Later, Zuma announced in a statement thursday night that he was replacing Gordhan with Malusi Gigaba, who until Thursday was the home affairs minister. He becomes South Africa's fourth finance minister in less than 18 months.
The move seems political, according to Ashbourne, Gordhan and Zuma had previously clashed over the management of state-owned enterprises and the need for a big new economic plan.



Gordhan skillfully guided the South African economy and promoted its business interests, thereby building a reputation as a steady hand.
His first stint as finance minister was between 2009 and 2014, when he left the post, but Zuma brought him back in December 2015 much to the relief of international investors after sacking two subsequent finance ministers, in a period of crises that struck the South African markets and currency.
Analysts earlier in the week warned that dismissing Gordhan and other key cabinet ministers could cause chaos in the already weak South African Economy.
John Ashbourne, Africa economist at Capital Economics, wrote in a research note that "This would be the worst outcome for markets over both the short and medium term,” He also  warned it's that  tension within the governing party, the African National Congress could worsen.
Before this week, the Rand had strengthened more than 20% this year and Gordhan was credited with its success.

Gordhan was charged for fraud in October, but said the move to prosecute him was "political mischief" denying any wrongdoing; the charges were dropped, though after extensive criticism from political and business leaders in South Africa.

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