South Africa's rand weaker as finance minister jitters weigh

Gordhan and former colleagues Deputy South African Revenue Service Commissioner Ivan Pillay and former Commissioner Oupa Magashula must appear in court on 2 November to face fraud charges relating to Pillay's early retirement and pension benefits to which he was allegedly not entitled.

He said other members of his foundation, including board members Derek Hanekom, Laloo Chiba, Max Sisulu, Kgalema Motlanthe, Barbara Hogan, Prema Naidoo, and Sophie Williams-De Bruyn, would be at the Pretoria Regional Court as well, he said in a statement on Wednesday.

Balton pins the whole issue on the manner in which Pravin and his team have managed treasury, the position they have taken on key issues and demand for sound governance.

South African markets have reacted with predictable alarm to news that Pravin Gordhan, the finance minister, will be charged with fraud.

But if there was a lesson in that episode, it was apparently lost on Mr Zuma, who has allowed doubts about his commitment to keeping the finance minister in place to fester throughout the year.

Abrahams confirmed the issuing of a summoning at a press briefing yesterday, explaining the charges related to R1.1 million payout made by SARS to Pillay after he went on early retirement with full benefits.

The former Rivonia trialist and Robben Island political prisoner said his show of solidarity with Gordhan was because of what the minister represented - clean governance, economic stability and ethical leadership.

"We welcome today's remarks by the Head of the NPA, Advocate Shaun Abrahams, rejecting claims of political interference in the prosecutorial process", the ANC said.

Gordhan, who is respected by financial markets, has called the allegations about the tax unit "political mischief".

"Gordhan is being politically lynched", said Nicholas Spiro, a partner at London-based Lauressa Advisory, which advises asset managers.

But many South Africans believe the nation's first citizen and his allies are the hidden political hands that directed the NPA to lay the charges, as Mr Gordhan has clashed with many of them since he was appointed finance minister in December a year ago.

No one from the rating companies had contacted him since the news of Gordhan's summons, Fuzile said.

Investors "are concerned and indeed some of the movements in the currency do reflect that", Fuzile said in an interview with Bloomberg TV.

When questioned on the timing of the charges - just two weeks ahead of the finance minister's budget meeting on the 26th of October - MPs were told the questioning was out of line, and of a political nature.

During the period, the number of long-term unemployed persons increased by 828, 000, accounting for 88 percent of the increase in the total number of the unemployed, Statistics South Africa said in its Labour Market Dynamics report.

Roodt added that it is now a near certainty that South Africa will be downgraded by rating agencies, which will result in higher interest rates. "This is a fundamental pillar of our constitutional democracy and the rule of law".

  • Anthony Vega