Business organsiations have reacted to President Jacob Zuma’s Cabinet reshuffle and the consequential axing of Pravin Gordhan as Finance Minister with concern and trepidation.

Business Unity South Africa (Busa) on Friday said it was deeply concerned about the ramifications of the extensive Cabinet reshuffle announced by Zuma in the early hours of Friday morning.

 “Busa’s view is that the timing of the reshuffle is most unfortunate. It has the potential to compromise both political and economic stability unless the executive can demonstrate the necessary capability and consistency, in a responsible manner, to radically transform the economy to achieve the required inclusive growth and employment creation objectives,” Busa President Jabu Mabuza said.
 
He noted that the reshuffle has had an immediate impact on the value of the rand.
 
Busa plans to call an urgent board meeting within the next few days to assess the potential impact of the Cabinet reshuffle on the economy and on business.

“Businesses large and small will be affected by the state of our economy.”

The organisation, however, said it respects the President’s prerogative and intends to work with the new Ministers in the best interests of the economy and the country. 

Business Leadership South Africa also criticised the manner and timing of the Cabinet changes announced by Zuma, stating that it is not in the economic interests of the country. "We strongly condemn the action. It is irrational, ill-timed and completely disregards the national interest," it said.

North-West University School of Business and Governance economist Professor Raymond Parsons, meanwhile, said he was surprised that Malusi Gigaba has been appointed Finance Minister.

“[He has] no obvious previous background in finance, economics or business and it will be a steep learning curve to master the complexities of fiscal policy. Gigaba will have big shoes to fill in taking over from Gordhan,” he said.

He added that Gordhan was instrumental in fending off junk status for South Africa.

“The damage to trust and confidence in these important relationships will need to be repaired if the country’s economic performance is to continue to successfully mobilise collaborative effort.”

Parsons noted that the financial markets, as well as the credit rating agencies, will also expect to see conservative fiscal policies still being followed and that the antipatronage stance taken by Gordhan will be upheld.

“Unfortunately, there are fears and suspicions that the new political team at the National Treasury may not do so, and that fiscal probity will become a victim of political factionalism,” he said, adding that the risk of an investment downgrade in June has also risen in the aftermath of the Cabinet reshuffle.

The South African Chamber of Commerce and Industry (Sacci) said it strongly believes that some measure of prudence should be exercised to avoid the subsequent knock-on effects that the reshuffle is likely to have on the economy.

“On the political front, it is our call as a business formation that there be cooperative partnership in managing sensitivities that may adversely impact our risk profile in international markets,” the industry body said in a statement.
 
Sacci urged government, together with representatives of business, labour and civil society, to get back to . . . calm the markets and to build investor confidence.
 
“South Africa needs a stable and conducive climate for economic growth for us to be a preferred investment destination. These fundamentals must be supported by carefully thought through political decisions to the best interest of our beloved country, South Africa.”

Meanwhile, University of Stellenbosch (USB) business school director Professor Piet Naudé said the Cabinet reshuffle diminish the government’s ability to execute its social mandate, and will reduce trust in the legitimacy of key democratic institutions. 
 
“We fully recognise the constitutional prerogative of the President to decide on the members of Cabinet. However, the context of this action, suggests that this decision is not in the best interest of South Africa,” he said.

Weighing in on Friday's Cabinet reshuffle, Corruption Watch said the centre of political gravity and the last hope for the South African democracy rested with the people of South Africa and their Parliamentary representatives.

"The events have clearly established that renewal will not come from within the ranks of the ruling party, which has clearly been captured by a narrow clique around the President and his corrupt business cronies," it said in a statement.

The organisation called on the South African public to make their dissatisfaction known on the streets, in the branches of their political parties and at the ballot box.

"It must be understood that the target of last night’s reshuffle was the National Treasury.  This will impact on the critical functions of the National Treasury itself and also on the institutions that make up the cluster of financial institutions of State, namely the South African Revenue Services, the South African Reserve Bank and the key financial and banking regulatory institutions."

Corruption Watch said it would like to see a motion of no-confidence in the President debated in Parliament.

"The public can then see who stands with the rogue president and who supports the South African democracy."