Banking Association 'strongly objects' to Cabinet reshuffle

Cape Town – President Jacob Zuma’s overnight cabinet reshuffle on Thursday put South Africa into turmoil at a time when South Africa is trying to address its problems, said Dr Cas Coovadia, director of the Banking Association of South Africa (BASA) in a statement on Friday morning. 

“The vacuum of leadership caused by the announcement of a cabinet reshuffle and appointment of a new Finance Minister, Deputy Finance Minister and the removal of additional cabinet ministers is of extreme concern for the whole of South Africa.”

READ: Open attack on Treasury as Zuma loyalists take control - economist

The Banking Association, Coovadia said, has no other choice but to say the reshuffle is not in the best interests of the country. “We are also left with little choice but to question the motives behind this action.”

The specific change in both Finance Minister (Pravin Gordhan) and Deputy Finance Minister (Mcebisi Jonas) creates a dire loss of institutional knowledge and raises legitimate and alarming concerns regarding issues of fiscal discipline, protection of institutions and indeed.

On Thursday night, Zuma replaced Gordhan with former home affairs minister Malusi Gigaba and his deputy, Jonas, with ANC-MP Sfiso Buthelezi – a former member of Parliament’s standing committee on finance. 

READ: Junk status on the cards after Zuma's night of long knives 

“BASA has previously voiced its deep concerns regarding the actions of the President. These have unfortunately fallen on deaf ears,” Coovadia said. 

“BASA objects again – and in the strongest possible terms. The President's actions directly undermine the significant progress made in the last 18 months towards building confidence in our country. These actions fly in the face of the imperative we all have to ensure political and policy certainty. The President's actions go further to place all South Africans at significant risk as a result of the fall out of any potential ratings downgrade.” 

Coovadia continued, saying the position of Finance Minister is a “critical one”. 

READ: Put SA first, pleads BASA's Cas Coovadia 

“An effective and credible National Treasury is also important. These institutions are pivotal to creation of certainty in markets and in management of potential risks introduced by numerous factors. 

“The action of removing a minister and a deputy minister who have gained global and national credibility and were performing optimally under difficult circumstances raises questions about the rationale for their removal. This further makes it difficult for their successors to conduct their responsibilities as well. 

“In short, the President's actions have created increased uncertainty and risk. This is exacerbated by the fact that some Ministers who have performed very badly and publicity criticised have been retained.”

Coovadia emphasised that any sovereign downgrade would have a serious impact on banks and the business sector in general. “It will also undermine our collective ability to fund social programmes, which will severely and sustainably worsen the lives of the poorest of the poor in our country.”

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