The confidence of investors in South Africa, which has been steadily recovering on the back of joint action by government, business and labour in recent months, is now in jeopardy, says Business Leadership South Africa (BLSA).

This follows media reports that the South African priority crimes investigation unit the Hawks had summoned Finance Minister Pravin Gordhan and other former South African Revenue Service officials over an investigation into an alleged rogue unit spying on the country’s leaders.

Reuters earlier reported that the officials were due to receive a 'warning statement', which is given to someone before they are charged with an offence.

The news sent the rand tumbling.

“It is shocking that our national collective effort to avoid a ratings downgrade and to restore inclusive economic growth is now being so insidiously subverted. If this sinister behaviour is allowed to continue the consequences will be devastating for our economy, and will fatally undermine our national efforts to address poverty, inequality and unemployment,” BLSA said on Wednesday.

The Banking Association South Africa (Basa) on Wednesday also showed its solidarity with Gordhan, warning that the focus needs to be on working with the Finance Ministry to mitigate social and economic issues and challenges impeding the economy instead of “pulling the rug out” from under its leader.

The association raised a red flag over the National Treasury being affected by this type of action by the police unit, that could only reverse the gains seen with the recent shift and realignment of the South African political landscape post the municipal elections.

“This is not in the national interest and we remain deeply nervous about the impact this will have on the country and economy, which has already been demonstrated in respect of the decline of the rand in last 24 hours,” said Basa MD Cas Coovadia, adding that he had confidence in Gordhan’s “seriousness in promoting the national interests”.

The move could break confidence in the economy and erode all the work Gordhan, Deputy President Cyril Ramaphosa and other government departments have put in to foster and accelerate growth.

Of particular concern is the “fundamentally damaging and negative” message that the actions and the approach taken sends to business, investors and ratings agencies, the latter of which the country is already treading a fine line with.

The ratings agencies had previously raised concerns about the volatility of the political environment and stability of the leadership of the country.

“We are absolutely clear that the law must take its course and are in support of what Minister Gordhan has himself stated – that no one is above the law.

“But we find the current events and allegations to be unacceptable,” Coovadia said, with BLSA suggesting that, should there be an investigation, it should be undertaken by a credible institution such as the Public Protector’s office.