Although the Presidency dismissed the reports about Zuma reshuffling cabinet and the plot to arrest the Finance Minister, economist Peter Attard Montalto said the President is hunting Gordhan to oust him from the finance portfolio.
That, the Nomura emerging markets economist said, is hard but not impossible for the President to actualize.
“Zuma is hunting for any route to remove Finance Minister Pravin Gordhan – which should be hard but not impossible. We think the market is still grossly underestimating political risk and President Zuma’s present position and power. He (Zuma) is not a lame duck and may discount market turbulence,” Montalto stated.
Montalto said “all sides have since denied there is anything going on‚ with the Presidency also denying any imminent reshuffle. However, it is assumed that any arrests should take place after the 3 August local elections so as not to disrupt ANC chances then,” said Montalto.
According to him, “the ongoing conflict between the tenderpreneur camp and the anti-tenderpreneur camp has reached something of a stalemate on a number of issues.”
He recounted thus:
“On SAA, Pravin Gordhan will not extend new guarantees until the board is reshuffled and chairwoman Dudu Myeni is removed, but President Zuma will not permit her removal.
On Sars, Pravin Gordhan’s attempts to take greater control and restrict commissioner Tom Moyane’s restructuring of the entity have apparently been blocked by President Zuma.
On the nuclear issue, the whole procurement process is still being blocked by the lack of sign-off from Pravin Gordhan and yet government rhetoric maintains that it will proceed.”
Given these stalemates, Montalto analogized that the President is hunting Gordhan and will “take a major step forwards to achieve his goals.”
We believe there is a scenario that Pravin Gordhan and others merely have to be charged in order for President Zuma to reshuffle the Cabinet and install a new Finance Minister. The charges could then hang in place for some time before being dropped and no trial would ever have to occur.
In the interim, whoever takes on the finance minister role would have had time to provide whatever sign-offs and project approvals President Zuma may require,” Montalto stated.