'Gordhan will secure investor confidence'

Saba says it will work with Gordhan to assure investors that SA remains committed to fiscal discipline.

Pravin Gordhan was reappointed Finance Minister by President Jacob Zuma on 13 December 2015. Picture: Reinart Toerien/EWN.

JOHANNESBURG - The South African Banking Association (Saba) says it will now work with Finance Minister Pravin Gordhan to reassure investors locally and abroad that the country remains committed to fiscal discipline.

Last night President Jacob Zuma announced Gordhan and David van Rooyen, who succeeded former finance minister Nhlanhla Nene, had swapped portfolios.

The rand slumped to record levels following Zuma's decision last week when he removed Nene.

Gordhan is due to address the public this afternoon.

Saba's Cas Coovadia says Gordhan's track record will help secure investor confidence following a turbulent week for the economy.

"We've got to send a positive message to the rating agencies so that we don't get further down, because that will be disastrous."

Coovadia says the country must move past ideological differences.

"We've now got to stop fighting and come together as nation. We know what we need to do and let's get the plan going."

MONITORING THE MARKETS

The banking sector was the hardest hit during last week's sharp decline in the value of the rand and banking shares on the Johannesburg Security Exchange.

Analysts will be monitoring the markets very closely this morning after the rand's slight recovery last night and this morning.

The markets have just opened with no way of telling which way it will go after last week's losses due to the removal Nene as finance minister.

The rand though continues to recover some lost ground, following Gordhan's sudden reappointment.

Gordhan is no stranger to the market.

He is known to be market friendly and fiscally conservative.

But analysts say it will take some time to regain the lost confidence brought on by the unexpected changes.

ANC WELCOMES GORDHAN

The African National Congress (ANC) officially welcomed Gordhan to his role and said Zuma's decision was not the result of pressure from the party.

At the same time, ANC stalwart and former Member of Parliament Professor Ben Turok said Zuma should reconsider his position as president after the chaos following the removal of Nene as finance minister last week.

Last night, Zuma said he had reconsidered his decision to appoint Van Rooyen to the National Treasury following representations that had been made to him.

Gordhan will now take over as Finance Minister and van Rooyen will take over the Cooperative Governance and Traditional Affairs Department.

The ANC's Zizi Kodwa said this shows Zuma behaves in a democratic manner.

"What is important is that the president, having appreciated the negative outcry after the appointment of van Rooyen, clearly he listened and appreciated the sensitivity of the portfolio."

He was then asked if this decision was the result of pressure from the ANC on Zuma.

He says, "Not at all. I think the president is the kind of person who listens and has the kind of leadership that is important for the country."

That means we don't at this stage know who convinced Zuma to change his position.

Turok said Zuma has made the worst decision of his career.

"The man at the top has lost it. I really think he's rattled. I am speechless with amazement at this kind of behaviour. It is incredible and unacceptable and I think Zuma must think about his position very seriously."

He appears to be joining Barbara Hogan who said on Friday Zuma should resign.