ANC stands by Zuma despite FinMin frenzy, no recall discussion

JOHANNESBURG, Dec 15 (Reuters) – South Africa’s ruling African National Congress said on Tuesday it did not support calls for President Jacob Zuma to stand down after his appointment of an unknown backbencher as finance minister last week sent shockwaves through financial markets.

Zuma had appointed David van Rooyen, a former mayor, to replace the widely respected Nhlanhla Nene last Wednesday, a move that sparked a selling frenzy in the rand, bonds and stock market.

Supporters of South Africa's ruling ANC party cheer as South Africa's President and party leader Jacob Zuma (not seen) arrives for the launch of the party's election manifesto at the Mbombela stadium in Nelspruit, January 11, 2014. REUTERS/Ihsaan Haffejee (SOUTH AFRICA - Tags: POLITICS ELECTIONS)
Supporters of South Africa’s ruling ANC party cheer as South Africa’s President and party leader Jacob Zuma (not seen) arrives for the launch of the party’s election manifesto at the Mbombela stadium in Nelspruit, January 11, 2014. REUTERS/Ihsaan Haffejee (SOUTH AFRICA – Tags: POLITICS ELECTIONS)

But Zuma then changed his mind late on Sunday and reappointed former finance minister Pravin Gordhan to the portfolio he led from 2009 to 2014.

Zuma’s dramatic U-turn caused a relief rally in South African assets but fuelled speculation the ruling party might make the 73-year-old stand down as president of Africa’s most advanced economy.

However, spokesman Zizi Kodwa said top party officials had not contemplated such drastic action.

“I can confirm that there was no discussion of recalling the president,” he told a news conference.

Earlier, deputy secretary-general Jessie Duarte said Zuma had decided to change van Rooyen’s appointment on Sunday afternoon after a 70 minute meeting with top party officials, including deputy president Cyril Ramaphosa.

Zuma also considered the views of the party’s allies in the union movement, as well as the concerns of the financial markets, Duarte said. The rand lost 9 percent against the dollar in the two days after van Rooyen’s appointment.

Top bankers, including the local head of U.S. investment bank Goldman Sachs, had earlier met senior ANC officials to lobby for an appointment that would help restore calm and confidence to South Africa’s markets, Duarte said.

From Bloomberg

(Bloomberg) — South Africa’s ruling African National Congress rallied behind President Jacob Zuma after he bowed to party leaders’ demands to reverse a decision to install an unproven finance minister.

Zuma briefed senior party officials on his plan to remove Nhlanhla Nene from the post and to nominate him as a director of the new BRICS development bank, Jessie Duarte, the ANC’s deputy secretary-general, told reporters in Johannesburg on Tuesday. While they knew that appointing David van Rooyen, 47, would cause a market reaction, they didn’t anticipate the rout in the rand and bond yields that followed, she said.

Zuma put Pravin Gordhan, who had served as finance minister until 2014, back into the post on Sunday, resulting in a partial recovery of the markets and relief among South Africans and investors. While party leaders held a “very robust” debate on the finance minister appointments and the aftermath, they didn’t discuss recalling Zuma, officials said.

“The president’s willingness to change an earlier deployment in the face of our sluggish economic climate and representations from role players demonstrated bold leadership,” the National Working Committee, a group of mostly top ANC officials, said in a statement after it met on Monday. “The ability of the leadership to review their positions in the face of legitimate concerns of our people are the hallmarks of a listening, responsive and accountable organization.”

At a meeting of the ANC’s top six officials on Sunday, Zuma suggested bringing back Gordhan to address the concern over Van Rooyen’s appointment, Duarte said.

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