Warnings of ‘uncertainty, market calamity’ if Hawks arrest Gordhan

Economists say a new team with no trust from the global financial markets would have to take over.

FILE: Minister of Finance Pravin Gordhan. Picture: GCIS

PRETORIA - Economists have warned of uncertainty and market calamity if the Hawks arrest Finance Minister Pravin Gordhan when he's summoned to report to a detective tomorrow.

Gordhan and three former South African Revenue Services (Sars) officials have been asked to present themselves to police to provide warning statements.

The Hawks are investigating the nature and conduct of a disbanded Sars covert unit, which was established during Gordhan's tenure as Sars commissioner.

Economist Azar Jammine says if the finance minister were to be arrested or removed from office, a new team with no trust from the global financial markets would have to take over.

He says the rand would plummet and inflation would quickly climb.

"Interest rates would then have to climb by another two or three percent. Consumers would feel the pinch massively and the economy would go into a downward spiral of a severe recession."

Economist George Glynos says the mere perception among investors of state capture is having an impact on the market.


Despite the fact that Treasury has confirmed that Gordhan is talking to his lawyers, the Hawks still will not comment on reports that he's been summoned to answer questions about the controversial Sars unit.

The Sunday Times had claimed a unit created while Gordhan was running Sars had spied on people, before apologising and retracting the claim.

But already some investors have said they believe this is a bid to weaken Gordhan, after the Cabinet Lekgotla appeared to resolve that State-owned enterprises will now be overseen by a new committee chaired by President Jacob Zuma.

The Presidency has also denied reports that Zuma and Gordhan are in a dispute over South African Airways, which is chaired by Dudu Myeni, who is also the chairperson of the Jacob Zuma Foundation.


Former Intelligence Minister Ronnie Kasrils says he views the moves against Gordhan as a simple power grab in a fight over resources.

He also says responsibility for this needs to be placed right at the top.

Kasrils says what is happening is simply unacceptable.

"It's the link to the whole rotten mess. The rot in government, the rot from the top, and we've seen how good people are removed from posts like the previous finance minister."