Formal police charges against finance minister Pravin Gordhan present the perfect opportunity for pres. Zuma to reshuffle his Cabinet under the pretence of rooting out corruption.

In an economic insight note, Nomura research analyst Peter Attard Montalto said that president Zuma learned an important lesson from ‘NeneGate’ – but it wasn’t a lesson on the economy and the disastrous impact of firing the country’s financial lead.

According to Attard Montalto, the Zuma faction would likely push the following points in weaving a narrative to get Gordhan out of Treasury:

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  • They will argue that National Treasury is overly fiscally conservative and ‘captured’ by ‘white monopoly capital’ and ‘foreign colonial forces’.
  • Pravin Gordhan is not the right finance minister for the ANC to implement the NDR (National Democratic Revolution – the key document that defines the ANC’s mission).
  • The Hawks’ cases against Gordhan mean he has to be removed in accordance with new rules in the ANC about cadres standing down from positions when charged by police.
  • Pravin Gordhan is being a blockage to the efficient running of the ANC’s (and particularly Zuma factions) tenderpreneur and patronage model.

“This kind of narrative may make no sense to investors, but we believe it can be effective internally and allow Pres. Zuma to proceed,” Nomura said.

Zuma would be taking a risk, of course, but the research group said that there is enough of a view within the ANC that credit ratings don’t matter, and that the party should not be “slaves” market push-back.

In this line of thinking, it looks more and more likely that a Cabinet reshuffle is on the cards – which would spell doom for Gordhan as well as deputy finance minister Mcebisi Jonas.

“A reshuffle has been seen as imminent even before the local elections to remove SACP members from Cabinet,” Attard Montalto said.