Johannesburg, South Africa | AFP | South Africa’s powerful trade union federation Cosatu, a key coalition partner of the ruling ANC, on Tuesday called for embattled President Jacob Zuma to resign following a deeply unpopular cabinet reshuffle.
Union general secretary Bheki Ntshalintshali said it was time for Zuma to “step down” after his purge last week of cabinet critics, which included the removal of the respected former finance minister, Pravin Gordhan.
Gordhan’s sacking contributed to a credit ratings downgrade to junk status on Monday by Standard & Poor’s as pressure on Zuma grew over the president’s move to oust opponents within the cabinet.
“We no longer believe in his leadership abilities,” Ntshalintshali said at a media briefing.
“The president was careless and reckless,” he said, adding that the downgrade would “cost the country a lot”.
Cosatu, along with the South African Communist Party and the ANC, was at the forefront of the effort to dislodge white-minority rule in South Africa that led to non-racial elections in 1994.
It has openly backed Zuma’s deputy, Cyril Ramaphosa, who led Cosatu during the anti-apartheid struggle, to succeed him in 2019 when the president must stand down.
– ‘Marching into the street’ –
“Even if it means marching into the street we will do that to make our point. We believe in this alliance led by the ANC, but we want a reconfiguration of this alliance,” said Cosatu president Sidumo Dlamini.
Zuma defended his change at the Treasury, saying Tuesday that “while the political leadership has changed, government’s overall policy orientation remains the same”.
“(New Finance Minister Malusi Gigaba) will also be reaching out to the international investor community urgently to assure them,” he said as he unveiled a South African-made railway locomotive in Pretoria.
“We are proud of having added many young ministers.”
Cosatu’s intervention came as Gigaba admitted that Monday’s downgrade to junk status was a blow to the economy.
“We acknowledge yesterday’s announcement was a setback… but now is not a time for despondency,” he told a media conference.
“What these reviews highlight is that we need to reignite our nation’s growth engines.”
S&P said the cut to below investment grade reflected “heightened political and institutional uncertainties” following Zuma’s shock purge of critical ministers.
The downgrade could mean that the government and state-run industries are forced to pay for their borrowing.
The shake-up has “put at risk fiscal and growth outcomes”, the ratings agency added as it downgraded South Africa to BB+ from BBB-.
The rand fell three percent against the US dollar following Monday night’s downgrade. The rand was trading at 13.64 against the greenback at 1345 GMT on Tuesday.
– ‘Black day for the country’ –
Moody’s ratings agency too said it was placing its South Africa rating — two notches above “junk” status — on review for a downgrade, due to “the abrupt change in leadership of key government institutions”.
South Africa’s leading financial paper Business Day called the downgrade “a black day for the country”.
“It also specifically raised the possibility that the trust established between business leaders and labour representatives could be eroded,” it wrote in its leading article.
Zuma’s cabinet overhaul exposed deep divisions within the ANC, and officials from the main opposition Democratic Alliance (DA) party are hoping to recruit enough support from ruling-party MPs to unseat the president if there is a vote of no confidence.
“The fact is that the minister is just not up to the job,” the DA said in a statement. “There is now a strong impression that Malusi Gigaba is just Des Van Rooyen in a designer suit,” it said, referring to a little-known MP who was named finance minister in 2015 and lasted just four days in the post.