South Africa’s new finance minister wants radically changed economy

Signalling a swing to the left, South Africa’s new finance minister says he wants to radically change the economy but pledging to maintain fiscal stability.

PRETORIA, SOUTH AFRICA (APRIL 1, 2017) (REUTERS) – South Africa’s new finance minister, Malusi Gigaba, signalled a swing to the left on Saturday (April 1), saying “we need to radically transform the South African economy” while pledging to maintain fiscal stability.

Gigaba, previously Home Affairs minister, also said during a televised news conference that he was committed to protecting South Africa’s cherished investment-grade credit ratings, which analysts have said are threatened after the removal of his predecessor Pravin Gordhan.

Radical economic change in the political language of South Africa’s ruling African National Congress (ANC) means the redistribution of wealth, land and opportunity to the black majority.

ANC administrations since Nelson Mandela’s in 1994 have promised to spread prosperity and the government has made strides, including the construction of 4.5 million housing units for the poor and the erection of a social welfare system that

puts food on the tables of the most vulnerable.

But South Africa remains one of the world’s most unequal societies, riven by glaring income disparities, an official jobless rate of 26.5 percent, and widespread poverty. The economy is barely growing and inflation threatens to reignite.

President Jacob Zuma, who faces a growing backlash from within his own party after electoral setbacks and missteps that included a fiasco that threatened the payment of social grants to 17 million, has taken a more populist tone on the economy.

Gigaba acknowledged the political challenges he faces.

Zuma’s sacking of the widely-respected Gordhan shook South African markets on Friday (March 31), undermining his authority and threatening to split the ANC.

Gordhan’s midnight sacking capped a dramatic week that saw him and his deputy – who was also fired – recalled from an investor roadshow in London.

It was also the culmination of months of sparring between Zuma and Gordhan which analysts and local media have said is rooted in the president’s desire to get more control over the Treasury, which has a world-class reputation for its

transparency and expertise.