Shannielle T Thompson
The rand plummeted against the US dollar last Friday after South African President Jacob Zuma’s unprecedented move to expel Pravin Gordhan, the country’s Finance Minister, from office, said Al Jazeera.
The events triggered an uproar of protests across the nation causing some to regard the president’s decision as the greatest political upset since the end of apartheid.
According to Al Jazeera, Standard and Poor’s Global Ratings (S &P), a leading credit rating agency, reduced South Africa’s rating to “junk status”. This occurred hours after the president hand-delivered a list of parliamentary cuts to top African National Congress (ANC) representatives in an unofficial meeting.
The rand fell 3 percent and is expected to decrease further in value throughout the rest of the year. S&P sites political uncertainty as a major cause for the downgrade. The Agency released a statement cautioning that in addition to the “negative outlook” that is now attached to Africa’s premiere industrialized economy, it “has increased the likelihood that economic growth and fiscal outcomes could suffer.”
Other agencies have yet to come forward with reports however, news sources say those might be revealed by the end of the week.
In addition to the economic downturn witnessed within days of the parliamentary “purge”, South African’s have been protesting their government and gathering in the streets since the news hit the airwaves.
Gwede Mantashe, Secretary General of the African National Congress said, “Ministers have been removed and the majority of them were good performing ministers”. Cyril Ramaphosa, deputy president and top ANC member called Mr. Zumas’ actions “unacceptable”, reported The New York Times.
People took to the streets in droves demanding the resignation of Zuma and the re-installment of Gorhdan while parading placards that read “a puppet of the Guptas and the Russians”
According to Breitbart News Network, Zuma, who is in his second term, has been criticized in past years for political corruption. It is alleged that Zuma has allocated government funds for the expansion of his private home in addition to showing favor to wealthy families, like the Guptas, who are considered “influential in government decisions”.
With elections in the near future, Zuma is said to be aligning the cabinet with leaders who support his own interest, despite being unable to run another term. He has since filled the cabinet seats with loyalists who share his view on future projects.
Gordhan is regarded as one of the best Finance Ministers South Africa has seen. According to BBC, the president criticized him for cutting spending to state-owned companies like South African Airways, Eskom, and Transnet. Gordhan also disagreed with the president’s stance on supporting a deal to build two nuclear reactors set to cost nearly $60 billion – money the treasury says the country does not have.
At a meeting with some of his poorer constituents, Zuma said his decision to reshuffle the cabinet is “to bring about radical socio-economic transformation and to ensure that the promise of a better life for the poor and the working class becomes a reality”, reported The Guardian. Gordhan, in an outgoing statement to reporters, implored the South African people to “organize against political corruption and mismanagement” like in the fight against apartheid.