Cabinet members support me - Gordhan

Finance Minister Pravin Gordhan says South Africa’s top MPs have confidence in his ability to do his job.

London - South African Finance Minister Pravin Gordhan said he has the support of the nation’s Cabinet to do his job, even as he can’t give any assurances that he won’t be arrested for espionage.

“I am in the job, I have the confidence of Cabinet,” Gordhan said in an interview with Bloomberg TV in London on Thursday. “I am in the job because the president requires me to be in the job.”

Johannesburg’s Sunday Times newspaper reported last month that Gordhan and other former senior tax officials were at risk of being arrested on espionage charges for helping establish a “rogue” investigative unit when he headed the revenue service. The National Prosecuting Authority denied the report. The nation’s Cabinet is led by President Jacob Zuma, whose office has denied reports of a campaign to undermine Gordhan.

South Africa needs to implement structural reforms to boost the economy, such as more flexible labor laws, to avoid its credit rating being cut to junk, S&P Global Ratings said on June 3 when it affirmed the nation at the lowest investment-grade level. S&P warned it could downgrade the rating if economic growth doesn’t improve or if institutions become weaker because of political interference.

Passed test

“We’ve worked collectively within government and outside of government for the last four months to avoid a downgrade. We’ve passed that test,” Gordhan said. “Over the next few months we have to deliver on the very concrete programmes that we’ve outlined to the South African public and investors.”

Africa’s most-industrialised economy contracted by 1.2 percent in the first quarter as mining and farming output slumped due to low mineral prices and the worst drought in more than a century. Gross domestic product will probably expand at the slowest pace this year since a 2009 recession, according to forecasts from the central bank and the government.

South Africa and other emerging markets can least afford the volatility and uncertainty caused by the UK’s vote to quit the EU, Gordhan said. While Brexit will affect the economy, the Treasury doesn’t foresee a recession, he said.

The rand strengthened 0.7 percent to 14.6934 per dollar by 6.32pm in Johannesburg. Yields on rand-denominated government bonds due December 2026 rose six basis points to 8.83 percent.

Gordhan was re-appointed in December to the position he held from 2009 until 2014 after business and ruling party leaders forced Zuma to backtrack on a decision to replace Nhlanhla Nene as finance minister with a little-known lawmaker.

BLOOMBERG