Zuma puts economy to the test with cabinet shake-up

trevor_manuel.jpgStability of markets and currency in doubt as award-winning Finance Minister 'says goodbye to staff'
By Daniel Howden, Africa correspondent

South Africa's most respected minister, Trevor Manuel, is reportedly set to leave the cabinet, presenting J

The fate of the award winning 56-year-old, who has been courted by the
World Bank among others, is seen as an indicator of the stability and
direction of President Zuma’s new government.

The country’s longest serving finance minister would be moved to a new
oversight body called the central planning commission when the
post-election cabinet is announced on 9 May, reports indicated
yesterday. An unnamed member of the minister’s staff told a South
African newspaper, the Sunday Times, that Mr Manuel had already held a function to say goodbye to his colleagues at Finance.

There has been no public comment from the ANC, which insisted during
the campaign that Mr Manuel would retain his job. In theory, the new
commission would exercise considerable power in monitoring the
government’s performance and work from inside the office of the
President. It is possible that Mr Manuel could serve in both roles.
However, any move for the Western Cape politician will add to
uncertainty about policy direction under Mr Zuma, a former communist.

The Zulu showman narrowly failed to secure the two-thirds majority he
had targeted in last week’s election. This means he will not be able to
change the constitution without the support of the opposition. But he
won a substantial 65.9 percent of the vote. Mr Zuma has close links to
the hard left and trade unions which will be expecting to have a more
influential voice in government.

The Congress of South African Trade Unions (Cosatu), which has clashed
often with Mr Manuel, wasted little time in demanding a return on its
political investment in Mr Zuma. "We must take vigorous action to
protect workers from the impact of the global economic crisis, create
new, decent jobs, transform the lives of the poor majority of South
Africans and ensure that we all share in the fruits of our labour"
Cosatu said yesterday.

While the legacy of former president Thabo Mbeki has been tarnished by
Aids denial, he and Mr Manuel can take the credit for relatively robust
public finances. The political capital enjoyed by the ANC in the wake
of apartheid was used in part to direct the party away from its
left-wing command economy roots and to pay down public debt with a
monetarist agenda.

The dividends from that unpopular housekeeping have since been ploughed
back into public services and benefits, with South Africa leading the
developing world in welfare spending.

It’s a record that has won Mr Manuel many admirers both inside and
outside the country and saw him placed at number four on the ANC party
list earlier this year. That list determines the order in which
candidates will move into parliament but also highlights their standing
in the party.

Mr Manuel grew up poor in Cape Town where under apartheid his mixed
race background saw him classified as "coloured". After joining the
ANC, he was imprisoned several times. He has held his current job since
1996, While Mr Manuel’s value to the ANC has been apparent for some
time, his status as a top-table politician came on 23 September when Mr
Mbeki resigned as president. Ten cabinet ministers, including Mr
Manuel, quickly announced their departures, however, it was the Finance
Minister’s resignation that mattered. Within an hour, millions of Rand
were wiped off the value of stocks, the market fell 4 per cent and the
Rand itself fell nearly 3 per cent against the dollar. Then Mr Manuel
rescinded his resignation, declared himself "more than prepared" to
serve under a new president.

Sources close to Mr Manuel have hinted that he may hanker after the
deputy presidency, allowing him to play a similar role to that of Mr
Mbeki during the one-term Mandela administration.

Possible replacements for the finance post include ANC stalwart Cyril
Ramaphosa and Mr Manuel’s accident-prone deputy Nhlanhla Nene, who
attracted unwanted fame by breaking his chair in a live interview. Many
in the business community would like to see Pravin Gordhan, who has
overseen a near doubling in tax revenues as head of the tax authority,
take over.

The Independent (UK)

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