S.A economic and political outlook

The South African economic and political landscape is once again in the spotlight as Finance Minister Pravin Gordhan may face charges for graft. Following the local government elections in August, which seemed to bring a sense of calm, the situation has escalated with potential legal action against the Finance Minister. Coenraad Bezuidenhout, Head of Public Affairs and Government Relations at FTI Consulting South Africa, discussed the implications of these potential charges in a recent interview on CNBC Africa. Bezuidenhout highlighted the political dynamics at play, indicating that the President Zuma's faction within the ANC is looking to assert dominance and make necessary changes. This has led to suspicions and lack of trust in the finance minister's past conduct, prompting investigations by the Hawks. The internal political battle is not only undermining individual confidence but also eroding trust in key institutions like Eskom and Treasury, which have been embroiled in open conflicts. The ongoing power struggle between the President's faction and the Treasury has left many questioning the motives behind the potential charges against Gordhan. Bezuidenhout suggested that the situation could escalate further as both sides continue to challenge each other's authority. However, he predicted that a longer-term view might prevail, with a focus on succession within the ANC rather than immediate intervention against the Finance Minister. The recent announcement of the Gupta family pulling out of the South African market has added another layer of complexity to the situation. While some view it as a strategic move to influence political maneuvering, others remain skeptical of the motives behind the withdrawal. The call for transparency and accountability in dealings with state institutions like Eskom has put figures like CEO Brian Molefe under scrutiny, potentially tarnishing their reputations. The interview also touched upon the risks associated with the President's actions and the perceived lack of independence of the Hawks in pursuing charges against Gordhan. Bezuidenhout warned of significant repercussions if the Finance Minister were to be removed, emphasizing the importance of Treasury's role in stabilizing the economy and financial markets. Overall, the uncertainty and political tensions in South Africa have once again cast a shadow over its economic outlook. The conflicting interests of different factions within the ruling party and the ongoing power struggles could have far-reaching consequences for the country. As the situation unfolds, it will be crucial to closely monitor developments and their potential impact on South Africa's stability and future direction.