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South Africa's economy in crisis as president faces no confidence motion
April 19, 2017, 1:15 pm
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Last week as thousands marched across South Africa calling for President Jacob Zuma to step down or be removed, the country’s already troubled economy is sliding further down the slope.

President Juma’s decision on 30 March to sack his widely respected finance minister Pravin Gordhan, and deputy finance minister, Mcebisi Jonas, on charges of colluding with international investors to topple him and take control of the economy, spooked international markets.

Global ratings agencies responded by downgrading South Africa’s credit ratings, with Standard & Poor’s Global (S&P Global) being the first to downgrade South Africa to junk status. This was followed four days later by another leading ratings agency, Fitch Ratings, lowering the country’s economic prospects to junk level. A third ratings agency, Moody’s, is yet to make its decision known.

In the immediate aftermath of the downgrades, both the South African Rand and the Johannesburg Stock Exchange (JSE) fell sharply, fueling street protests calling on the president to step down. Three of the ruling African National Congress’ (ANC) top six leaders also added their voice to the public anger, with Deputy President Cyril Ramaphosa, Secretary-General Gwede Mantashe and Treasurer-General Zweli Mkhize , publicly criticizing the president’s decision to sack the finance minister and reshuffling his cabinet. This unprecedented show of dissent within the ANC was followed by the ANC’s alliance partners in the government, the powerful Congress of South African Trade Unions and the South African Communist Party, as well as veterans and stalwarts of the liberation struggle calling on President Zuma to step down.

Following a consultation process, Parliament has now announced that the motion of no confidence under Section 102 of the Constitution will be scheduled for debate in the National Assembly on Tuesday, 18 April 2017.

The no confidence motion is another Rubicon moment for the ANC and South Africa. It will only take a little over 50 of the ANC's comfortable majority of 251 (out of 400) MPs to help the opposition carry the motion and end the president’s political career. But the president has been known to survive similar dissent since he took office in 2009. In November of last year he is believed to have overcome opposition within the party at a closed door meeting of the ANC Executive Council, when at least four ministers called for his ouster.

President Zuma appears unruffled by this latest challenge to his authority; he said the sacked ministers were working to topple him and that his cabinet reshuffle was designed to accelerate his campaign of 'radical socio-economic transformation'.

If the no confidence motion on 18 April fails to oust the president it could further alarm international markets and this is not something that the South African economy needs as it is increasingly dependent on capital inflows to finance its debt and fiscal deficits.

 

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