Gordhan moves to calm jitters

NEWLY re-appointed Finance Minister Pravin Gordhan yesterday briefed the country on how he plans to revive investor confidence in the economy following a disastrous week precipitated by the firing of Nhlanhla Nene. Flanked by Reserve Bank governor Lesetja Kganyago and Deputy Finance Minister Mcebisi Jonas‚ Gordhan said: “I’m relatively familiar with the terrain.” The rand rose 5% and shares gained as much as 2% at times yesterday, cheering the appointment. Gordhan admitted that the appointment of David van Rooyen as finance minister had been a miscalculation. “There are times when you have to admit that there was a miscalculation and the need for the review of the decision,” he said. The sacking of Nene shook the market, with the currency plummeting and the stock market dropping by 2.95%, while bond yields shot up by 150 basis points. Gordhan, who was previously finance minister between 2009 and last year, was speaking to journalists hours after his appointment was announced. He refused to divulge details about when he was approached for the position, saying this was between him and President Jacob Zuma. “I was approached over this weekend, clearly. I then had to consult with my family we thought we were going to retire quietly one of these days.”

Gordhan said the government would move swiftly to stabilise South African Airways and was unwavering on the resolve that good governance was non-negotiable. “It is high time individuals stop playing with state entities . . . as if they are a personal toy. “We cannot avoid the necessity of wideranging reforms that will put them on a sustainable financial footing.” Gordhan also moved to assure investors there would be no fiscal policy shift and that the government would stay on the course of sound fiscal management. Meanwhile, Zuma’s about-turn on the finance minister has put his credibility on the line. However, opinion is divided on whether he could be forced to relinquish the reins of power. “Zuma must think about his position very seriously,” former senior ANC MP and respected anti-apartheid activist Ben Turok said. “It may not be his death knell, but it’s certainly the turning of the tide.” Centre for the Study of Democracy director Steven Friedman said: “I don’t think there is a huge likelihood that he will be recalled. “If he had . . . stuck with Van Rooyen, he would have been in more immediate danger.” – Additional reporting by Reuters