Jacob’s gladder

6 April 2017 By George Hay Follow @gfhay

President Jacob Zuma seems to be doing his best to get foreign investors to dump domestic assets. That may not lead to a sudden stop: only a small minority face being forced sellers. The bad news is that this could slow the process to replace him with a more responsible leader.

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South Africa's African National Congress closed ranks around President Jacob Zuma on April 5 after two key allies of the ruling party called for his resignation following a cabinet reshuffle that cost the country one of its investment-grade credit ratings.

The rand fell more than 1 percent against the U.S. dollar and bonds weakened after ANC Secretary General Gwede Mantashe told a news briefing that the ANC would not support removing Zuma, whose party leadership role ends in December. Zuma's presidential term will finish in 2019.

S&P Global Ratings cited Finance Minister Pravin Gordhan's departure last week as one reason for its downgrade of South Africa to "junk" in an unscheduled credit rating review on Monday, a move that is set to push up the country's borrowing costs.

Mantashe said the ANC had accepted the "irretrievable breakdown of the relationship" between Zuma and Gordhan as the reason the finance minister was sacked.

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