President Jacob Zuma’s midnight sacking of his finance minister has shaken South African markets and threatens to split the African National Congress (ANC) that has governed since the end of apartheid.
Deputy President Cyril Ramaphosa, who is one of the leading candidates to replace Zuma as ANC president, described the decision to remove respected finance minister Pravin Gordhan as “totally, totally unacceptable”.
However, Zuma’s reshuffle rallied support among powerful sections of the party that are hostile to banking interests they see Gordhan as representing.
The Women’s League and the influential ANC youth wing welcomed the reshuffle, citing hopes for land redistribution for poor black farmers, free education and more black involvement in state financial institutions.
“Younger ministers will mean more transformation,” Youth Wing leader Collen Maine said.
Ramaphosa said Zuma removed Gordhan on the basis of a “spurious” intelligence report that accused him and his deputy Mcebisi Jonas of plotting with banks in London to undermine the South African economy.
Jonas was also sacked by Zuma.
Opposition parties and ANC sources say Zuma removed Gordhan because he was obstructing Zuma’s allies’ access to state funds.
Zuma and his followers have been accused of corruption and links with the wealthy Indian Gupta family.
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A report by a constitutionally mandated watchdog last year said the Guptas influenced Zuma in making government appointments.
The Guptas and Zuma deny the allegations.
ANC Secretary-General Gwede Mantashe also openly criticised Zuma, in what analysts believe is a sign he will back Ramaphosa.
Rumours Zuma was to replace Gordhan have unsettled markets all week and ANC members urged the president to reconsider.
The rand has fallen five per cent against the US dollar since its highest point before the reshuffle and is set for its biggest weekly decline since December 2015.
Banking stocks were down more than five per cent on Friday and bond yields climbed sharply.