Over the past few months, I’ve seen many rational South Africans threaten to throw in the towel. When reminded of the courage and humility of Finance Minister Pravin Gordhan, hope springs once more. Gordhan has at times seemed to have been the only beacon of sanity in a political story where the news flow is all about abuse, incompetence, arrogance, tenderpreneurs and crony capitalists. But while cabinet meetings may be tense, he is no Lone Ranger. On the strength of unimpeachable integrity over decades, Gordhan enjoys the public support of the business community, the media, ANC elders and SA’s often too-silent majority. His allegiance to an increasingly wayward ANC baffles some. But despite its well documented failings, the party remains a very broad church and, for the foreseeable future, South Africa’s political rulers. Often more good can be achieved by staying within the walls of a fortress than shouting from outside. – Alec Hogg
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(Bloomberg) — South African Finance Minister Pravin Gordhan said he has the support of the nation’s cabinet to do his job, even as he can’t give any assurances that he won’t be arrested for espionage.
“I am in the job, I have the confidence of cabinet,” Gordhan said in an interview with Bloomberg TV in London on Thursday. “I am in the job because the president requires me to be in the job.”
Johannesburg’s Sunday Times newspaper reported last month that Gordhan and other former senior tax officials were at risk of being arrested on espionage charges for helping establish a “rogue” investigative unit when he headed the revenue service. The National Prosecuting Authority denied the report. The nation’s cabinet is led by President Jacob Zuma, whose office has denied reports of a campaign to undermine Gordhan.
South Africa needs to implement structural reforms to boost the economy, such as more flexible labor laws, to avoid its credit rating being cut to junk, S&P Global Ratings said on June 3 when it affirmed the nation at the lowest investment-grade level. S&P warned it could downgrade the rating if economic growth doesn’t improve or if institutions become weaker because of political interference.
Passed Test
“We’ve worked collectively within government and outside of government for the last four months to avoid a downgrade. We’ve passed that test,” Gordhan said. “Over the next few months we have to deliver on the very concrete programs that we’ve outlined to the South African public and investors.”
Africa’s most-industrialized economy contracted by 1.2 percent in the first quarter as mining and farming output slumped due to low mineral prices and the worst drought in more than a century. Gross domestic product will probably expand at the slowest pace this year since a 2009 recession, according to forecasts from the central bank and the government.
South Africa and other emerging markets can least afford the volatility and uncertainty caused by the U.K.’s vote to quit the EU, Gordhan said. While Brexit will affect the economy, the Treasury doesn’t foresee a recession, he said.
The rand strengthened 0.7 percent to 14.6934 per dollar by 6:32 p.m. in Johannesburg. Yields on rand-denominated government bonds due December 2026 rose six basis points to 8.83 percent.
Gordhan was reappointed in December to the position he held from 2009 until 2014 after business and ruling party leaders forced Zuma to backtrack on a decision to replace Nhlanhla Nene as finance minister with a little-known lawmaker.
