South African President Jacob Zuma has ordered his finance minister to return from an overseas investment trip, the presidency said today, fuelling speculation that a cabinet reshuffle is imminent.
Zuma's decision to recall Pravin Gordhan from Britain has led to media and opposition speculation that he could be sacked. The two men have had an increasingly uneasy relationship in recent months.
Friction has soared between Zuma, who is seeking to fund a "radical economic transformation", and Gordhan who is taking a stand against graft and heavy spending.
The main opposition Democratic Alliance warned that the developing incident would be seen as "a major setback for the economy in South Africa" and was a prelude to a reshuffle.
"(It) is so bizarre that it appears, at best, calculated to humiliate the minister or, at worst, to suggest that the minister is about to be fired in a cabinet reshuffle," said shadow finance minister David Maynier.
Local media have also speculated that the recall is a precursor to a change of personnel at the top of government.
"Fears are growing that President Jacob Zuma will finally pull the trigger and reshuffle his Cabinet," wrote the Daily Maverick news site.
The tension has also spooked the foreign exchange markets with the rand losing almost three percent against the US dollar on the day, with USD 1 now buying 12.65 rand. The treasury could not be reached for comment.
"President Jacob Zuma has instructed the Minister of Finance, Mr Pravin Gordhan and Deputy Minister Mcebisi Jonas to cancel the international investment promotion roadshow to the United Kingdom and the United States and return to South Africa immediately," the presidency said in an emailed statement which did not give a reason for Gordhan's recall.
South Africa was granted a reprieve at the end of last year when rating agencies did not drop it to the "junk" investment category following a series of downgrades, but they warned of the impact of poor growth and political instability.
Nomura market analyst Peter Attard Montalto said that the week ahead could prove critical for South Africa's political and economic stability.
"It seems this week is going to be really decisive either way. It is also possibly that Zuma wants PG there if he only reshuffles the deputy," he wrote in a note to investors.
"A reshuffle is ready to go and something Zuma wants to do. It could be deployed rapidly if Zuma does want to do it... This is going to be a key week for political risk."
In December 2015, Zuma suddenly sacked Gordhan's predecessor Nhlanhla Nene and replaced him with an obscure lawmaker, triggering panic among investors and a sharp drop in the rand.
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