South Africa’s finance minister under fire

South Africa’s finance minister under fire

SOUTH AFRICA’S currency, the rand, is a volatile one. It is prone to sharp drops when its finance ministry, responsible for the National Treasury, comes under attack from President Jacob Zuma or his cronies. This week it plummeted again: Pravin Gordhan, the respected finance minister and guardian of the public purse, is being hit with dubious charges of criminal misconduct. This latest twist in a protracted struggle over control of the Treasury is playing out against a fractious backdrop. South Africa’s economy is limping, violent protests have closed many universities and the ruling African National Congress (ANC) appears paralysed by factional disputes.

The case against Mr Gordhan appears thin. He is facing fraud charges related to the approval of an early retirement package for an ex-colleague. The investigation was handled by the Hawks, an elite police unit tasked with handling “priority crime”, which is seen as close to Mr Zuma. The charges were announced by the country’s chief prosecutor at a press conference attended by clapping supporters. Mr Gordhan faces another investigation by the Hawks, too: into his role, when he was head of the South African Revenue Service, in setting up a surveillance unit which asked too many awkward questions.

Mr Gordhan questions the timing of the charges, ahead of a mid-term budget due October 26th, and just after a trip to America to woo investors. Analysts now expect a cabinet reshuffle that will see him ousted, a move that would cause further turbulence. “If President Zuma does succeed in removing another respected finance minister, we expect that the rand will continue to fall sharply,” says John Ashbourne of Capital Economics, a consultancy.

Mr Zuma too is on his heels. The country’s anti-corruption watchdog is due to deliver a preliminary report on October 14th into whether the Gupta family, wealthy friends of Mr Zuma, have had undue influence on government appointments and contracts. The president is also facing renewed charges related to a 1999 arms deal. He is currently appealing a court decision that found the dropping of 783 counts of fraud, racketeering and corruption shortly before 2009 elections was “irrational”.

Some top ANC officials have leapt to Mr Gordhan’s defence. The party’s chief whip called him “an honest man”. Opposition parties have expressed universal support, with the leftist Economic Freedom Fighters instructing its members to “occupy the streets” when Mr Gordhan appears in court in November.