Zuma Urged to Intervene in Gordhan Police Probe by ANC Leader

JOHANNESBURG (Capital Markets in Africa) – South African President Jacob Zuma must intervene in the police investigation of Finance Minister Pravin Gordhan because it’s heightening chances that the nation’s credit rating will be downgraded to junk, said the Johannesburg chairman of the ruling party, Parks Tau.

“The issues around the finance minister require urgent intervention because the single most important task right now is to ensure that all of us as South Africans protect the economy of this country,” Tau, the 46-year-old former mayor of the country’s financial hub, said Wednesday in an interview in Bloomberg’s Johannesburg office. “Right now we are creating uncertainty and that uncertainty is not helping our ability to cohere around protecting the economy of this country.”

While Tau didn’t say Zuma should simply order an end to the police investigation, he suggested the inquiry which became public in February should be accelerated. A special police unit known as the Hawks is probing the finance minister over an allegedly illicit surveillance unit set up when he led the national tax agency. Gordhan, in an interview with Bloomberg TV in New York Tuesday, called the probe “a bit of political mischief.”

Gordhan Questioning
Reports in August that the Hawks asked Gordhan, 67, to appear at its offices for questioning hit the nation’s currency and bonds and uncertainty over his position has weighed on investor confidence. He refused the request to meet investigators, and since then the police and National Prosecuting Authority haven’t made contact with him, he said in the interview. While Zuma has expressed support for Gordhan as minister, he’s said he can’t intervene in a legal process.

Gordhan is meeting investors in New York this week with a delegation of business leaders and central bank Governor Lesetja Kganyago to help attract investment and stave off a possible credit-ratings downgrade.

“As the ANC and South Africans we need to be concerned about a possible credit-rating downgrade,” Tau said. “So there’s a duty on business and government to mitigate it and to ensure that the things that could trigger a downgrade are dealt with expeditiously, including the issue surrounding the minister of finance.”

Investor Concern
The presidency and the Treasury have had a tense relationship since Zuma fired the respected Nhlanhla Nene as finance minister in December and replaced him with a little known lawmaker. After investors sold the nation’s rand and bonds and business and ruling party leaders lobbied the president to change course, he reinstated Gordhan four days later to the post of finance chief, which he had held from 2009 to 2014.

Since then, Zuma has rebuffed Gordhan’s request to fire the nation’s tax chief for insubordination and delayed his attempts to install a new board at the loss-making state airline.

“There’s a narrative that going on: ‘Is it Pravin versus Zuma’. I don’t think that’s a helpful narrative, but I do think that the president should intervene,” Tau said. “Ultimately, the head of state is responsible for overseeing that government functions and that the country’s interests are served. ”

Source: Bloomberg Business News