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President Jacob Zuma on Monday instructed Pravin Gordhan and his National Treasury team to immediately return home from an international roadshow without giving reasons for this move.
This news sparked speculation that President Jacob Zuma will soon reshuffle his Cabinet and replace Gordhan as finance minister.
“President Jacob Zuma has instructed the Minister of Finance Pravin Gordhan and Deputy Minister Mcebisi Jonas to cancel the international investment promotion roadshow to the United Kingdom and the United States and return to South Africa immediately,” Presidency spokesperson Bongani Ngqulunga said on Monday.
The news caused the rand to weaken to 12.66 to the US dollar from an earlier 12.31, which was the rand’s best level since June 2015. On Monday afternoon, the rand was trading at 12.63.
Annabel Bishop, an Investec economist, said that the rand’s sharp move on Monday reflected fears that Gordhan’s tenure might be in jeopardy again.
“In the week ahead we expect the rand to trade in a range of R12.40 to R13.40 against the US dollar,” Bishop added.
Gordhan and his team were on an international investor road show for the whole of this week. The trip would have take Gordhan to London and New York.
The purpose of the trip was to update UK and US investors on the economic developments in South Africa.
Nomura economist Peter Montalto said in a note that Zuma was testing the water for a long speculated Cabinet reshuffle.
“Well this is quite the shock way of doing things,” he added in response to Zuma’s instruction to Gordhan.
The instruction on Monday came a day before the battle between Gordhan and the Guptas, allies of Zuma, appear in court in Pretoria.
Gordhan is seeking declaratory relief from the courts to state that he cannot intervene with the banks regarding the closure of Oakbay’s bank accounts.
“Gordhan is used to playing such high stakes political poker games,” Montalto said.
“It is also possibly that Zuma wants Pravin Gordhan there if he only reshuffles the deputy,” he added.
There has been speculation that Brian Molefe, he was sworn in as an ANC MP in February, could replace either Gordhan as finance minister or Mcebisi Jonas as deputy finance minister.
“Watch Molefe into deputy (or maybe minister position)... and Nkosazana Dlamini-Zuma into Presidency as a minister for transformation or similar,” Montalto said.
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