While you were sleeping …
This morning, the nation awoke to the shocking, though not wholly unexpected, news that the finance minister and his deputy, among others, had been ousted, in a ‘cabinet reshuffle’.
Reaction has been almost unanimous in its condemnation of this move: threats to impeach have been repeated, the DA is circulating a #noconfidence petition, and social media is ablaze with comments: from economic and political pundits to your average citizen (one asserting that “only thieves and scoundrels do deals at night”).
Political analyst, Daniel Silke, says that the newly appointed Finance Minister, Malusi Gigaba, will be hard pressed to reassure rating agencies, who will be unnerved by the axing of Gordhan and Jonas.
Whether a downgrade will become a reality or not, investment managers have been anticipating it for some time, given our uncertain economic environment. Portfolio managers have been making adjustments in anticipation of just such depreciation of the rand … and will continue to do so as they watch the market shifts. We have always recommended a diversified portfolio to weather such political and economic changes, and reiterate our commitment to you.
Here is a summary of the cabinet changes from EWN, for those interested in the detail.
We will see much more of the unfolding of these changes next week, following the cabinet meetings scheduled over the weekend with the new ministers, and after the markets have absorbed the impact of the President’s decision.
What is always reassuring to me is that we are all in this together. We all want a thriving economy that results from ethical and responsible leadership.