With the controversial ministerial job offer the deputy finance minister Jonas Mcebisi said he was offered by the Gupta family alongside other issues connected to the influential family, economist postulates that cabinet reshuffling would be the next thing on Mr president’s mind.
Market economist Peter Attard Montalto of Nomura reacted to the ANC’s National Executive Committee (NEC) meeting held over the weekend by saying that while state capture is being probed, the ANC has closed ranks and given Zuma a six-month breather.
Montalo who believes that “the ground is shifting”, said President Zuma’s departure on the back burner has left a lot of issues unresolved. Among the issues he made mention of were: Conflict between the Hawks and Finance Minister Pravin Gordhan, the South African Airways board battle which Montalto believes is set to move forward after Easter, and the nuclear power issue “hovering in the background” with the South African Revenue Service
The economist said above all these, what is feared most by markets is cabinet reshuffle which he said could take place in few coming weeks.
“The most interesting threat to come for markets is a cabinet reshuffle. This has been mooted for a year now in public and private and we believe it remains on the table. Doing so now, or over Easter, would be blatant for President Zuma after the NEC, but would be a show of and a consolidation of power. There has been too much noise, so it could be a real possibility in coming weeks.”
However, while the anti-Zuma faction may start to go the legal route against the Hawks, Mantalo said “resolution on this front seems unlikely in the immediate future and so will remain a distraction to markets and policy makers from the bigger issues of avoiding a ratings downgrade, etc”.
Mantalo categorically stated in what he referred to as “Nenegate lite”, that the deputy finance minister Jonas could be removed and replaced with Zuma’s ally who would be within the National Treasury as a tenderpreneur faction, a man who could influence and control the Public Investment Corporation (PIC) and local development banks, for which the deputy finance minister is normally chairperson.
Not only did Mantalo postulate the removal of Jonas, he also said that the Higher Education Minister Blade Nzimande and Rob Davies of the Department of Trade and Industry alongside Minister in the Presidency Jeff Radebe could be fired as well.
Nzimande and Davies happen to be members of the South African Communist Party which has been “increasingly vocal and anti-Zuma since the second half of last year while Radebe, a man often referred to as the South African “Prime Minister” is seen as too powerful for the president to influence.
“We watch and wait for political moves in the factional battles in coming months, but any ‘resolution’ of this issue – to take a larger step forwards in the succession battle itself via possible Zumxit, still looks far off.
In this environment, structural reforms and the expense of political capital on policy, to avoid a downgrade look unlikely – as does encouraging the private sector to invest.”