Reshuffle brings ‘renewed energy’
• Zuma moves to assure markets on cabinet changes
President Jacob Zuma moved on Tuesday to calm the markets amid rising discontent that followed his recent cabinet reshuffle, saying he expected the changes to bring “renewed energy” into his government.
But Zuma dodged tough questions from journalists about a ratings downgrade by S&P Global Ratings, which raised concern about last week’s cabinet reshuffle.
Zuma was speaking at the official launch of Africa’s first locally designed locomotive at Transnet’s engineering yard.
SA’s foreign currency debt was downgraded by S&P on Monday to junk status‚ effectively making it harder for the government to borrow money.
Zuma thanked former finance minister Pravin Gordhan and his deputy Mcebisi Jonas for their hard work and contribution to a smooth handover to their replacements.
The president fired the two ministers last week and replaced Gordhan with former home affairs minister Malusi Gigaba. Sfiso Buthelezi is the new deputy finance minister.
“For over a decade, SA has grappled with the global economic downturn. We must work hard to promote economic trade among African countries and boost economic development,” Zuma said. “We are proud of having added many young ministers — which is an investment in the future. If we don’t enable young MPs to gain experience now, we may battle with experience at a later stage in the national executive.”
Zuma praised Gordhan’s work in the Treasury and said that Gigaba would continue on the same path.
“While political leadership has changed‚ government policy has not. Government will remain committed to a measured fiscal policy‚ which stabilises the rise in public debt‚” said Zuma.
He assured the country that there was unity in the Treasury and financial portfolios.
“A stable Treasury and financial portfolio are critical for the economy. The new finance minister and his deputy will prioritise stability in both Treasury and the finance portfolio.”
Zuma emphasised that the country should unite and work together‚ “especially in light of the current socioeconomic challenges we face”.
He assured the private sector and international community that they would continue to work with SA’s partners.
“We will reach out to the international community to assure them that SA is stable. We assure South Africans the government will do everything to promote cohesion.
“We know that there have been public statements on disagreements‚ which have demoralised people. There are serious weaknesses which we will attend to with renewed vigour,” he said.
Meanwhile, Transnet said it was targeting R2.4bn — rolling stock exports by 2020.
The locomotive forms part of Transnet’s market demand strategy, which is aiming to position SA as a preferred original-equipment manufacturer for Africa’s rail system.
Zuma said that Africa had achieved consistent 5% real growth rates since 2008 and SA was pivoting its trade relationships towards the continent.
There are $30bn in African rail projects planned or that are under way.
The largest, a 495km link between Mombasa and Nairobi in Kenya led the country to borrow heavily, with the World Bank in 2014 declining to fund it and suggesting alternatives.