South African President Jacob Zuma said on Thursday he has full confidence in Finance Minister Pravin Gordhan, who is under police investigation over a suspected spy unit at the tax service.
Zuma said he could not intervene in the investigations despite the negative impact the probe has caused on the economy, according to a statement released by the presidency.
The rand, which had tumbled since Tuesday in response to the investigation, extended gains to 1.3 percent after Zuma’s statement.
(Reporting by James Macharia; editing by John Stonestreet)
Finance Minister Pravin Gordhan. (Photo: Matthew le Cordeur)
The presidency said on Thursday it wouldn’t stop an investigation by a special police unit into allegations that Gordhan oversaw the establishment of an illicit investigative unit during his tenure as head of the national tax agency, even as Zuma expressed “full confidence” in the finance minister.
Opposition parties and some independent analysts have accused Zuma, 74, of trying to gain greater control of the National Treasury to further his and his allies’ economic interests before his second and final presidential term ends in 2019. He has denied the allegation.
The rand was little changed at R14.2/$ by 07:22 and has declined 4.8% this week. It’s set for the largest weekly slump since the five days through December 11, the period when Zuma fired then-Finance Minister Nhlanhla Nene and replaced him with a little-known lawmaker. It’s the worst performer this week against the dollar among 24 emerging-market currencies tracked by Bloomberg.
“The country remains on a knife edge,” said Warrick Butler, head of emerging-market spot trading at Standard Bank in Johannesburg. “As we all know too well these days, the country’s leadership decisions can be unpredictable.”
Gordhan was summoned to report to the Hawks police unit on Thursday. The finance minister said on Wednesday he had done nothing wrong and wouldn’t report to police.
The yield on rand-denominated bonds due in December 2026 were little changed at 9.07 percent Friday, the highest in almost two months, and has increased 60 basis points this week for the biggest increase over such a period since Zuma fired Nene.
“The fight is on,” RMB analyst John Cairns said on Friday. “Political heavyweights, including the deputy president, have come out in support of Gordhan. But the Hawks and their supporters might still take the plunge. The Business Day’s editorial argues that Gordhan’s arrest is ‘inevitable’ and could happen ‘perhaps as early as this week’.”
“Initial results from our survey suggest people are split down the middle on whether Gordhan will remain in his post or not. Pretty much everyone agrees, however, that the rand would bomb if he goes.
“We, like everyone else, just don’t know what will happen. However, it still appears to us that not enough risk is priced. Our survey is showing a 50% probability that he goes, with the rand declining by R3.00 as a result.”
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At least seven people have been killed in a bomb and gun attack on a seaside restaurant in the Somali capital Mogadishu.
Police said a car bomb exploded outside the Banadir Beach Club in the Lido area and gunmen then stormed the building.
Security forces say they killed two attackers and arrested another after a six-hour operation overnight.
The militant Islamist group al-Shabab stages regular attacks in Mogadishu and other parts of Somalia.
Earlier this year, 17 people died when the group stormed a restaurant on Lido beach.
Al-Shabab, which is linked to al-Qaeda, was ousted from Mogadishu in August 2011 but still has a presence in large areas of southern Somalia.
Kenyan athletes are stranded in a Rio shanty town where gunshots can be heard, following the closure of the Olympic village, the team captain says.
Officials delayed their return home as they looked for a “cheap flight”, said Wesley Korir, a marathon runner who is also an independent MP.
He posted images on Twitter of dilapidated buildings in the area where he said they were forced to stay.
Team Kenya has been dogged by allegations of mismanagement at Rio.
Sports Minister Hassan Wario says the government has responded by disbanding the National Olympic Committee of Kenya (NOCK) and ordering an investigation into the problems the team faced in Rio, reports the BBC’s Wanyama Chebusiri from the capital, Nairobi.
Mr Korir said athletes had experienced “hell” and he would demand action when he returned home.
The team won 13 medals, the highest by an African country, and this “is how they treat us”, he added.
The men’s marathon team is among the athletes stuck in the shanty town, except for gold medallist Eliud Kipchoge, who bought his own ticket to leave, Mr Korir said.
Athletes were ordered to stay indoors as gunshots were heard all night, he added in a tweet.
Kenya won six gold medals, six silver and a bronze at the Games, which ended on Sunday.
Okechukwu Nnodim, Abuja
Traditional rulers and stakeholders from the Niger Delta on Thursday met the Federal Government and read out terms that would build confidence as well as restore peace in the region.
This follows the ceasefire announced by the Niger Delta Avengers and other militant groups in the region on August 21, 2016.
In a statement, which was read at the headquarters of the Nigerian National Petroleum Corporation in Abuja by the Bolowei of Gbaramatu Kingdom, Chief Wellington Okirika, the traditional rulers listed six things the Federal Government should do in order to build confidence and stop the destruction of the country’s oil assets by militants in the region.
They said, “Having acceded to the call for a ceasefire by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, on August 4, 2016, the buck has now been passed to the table of the Federal Government as driven by the Minister of State for Petroleum Resources – a representative of the Federal Government.
“For the purposes of building confidence in the system, we wish to state here that as a matter of urgency the Federal Government should appoint/constitute a Federal Government dialogue team; release the 10 innocent school children arrested by the Nigerian Army on the 28th of May, 2016 in Oporoza and others in detention on trumped up charges.
“Return the Golden Sword, being the symbol of authority in the Gbaramatu traditional institution; return the three traditional council speed boats in custody of the Nigerian Army; cessation of hostilities perpetrated by the military in the Niger Delta region; and equally important, the Federal Government should make a categorical statement about the opening of the Maritime University, Okerenkoko Delta State for academic activities in the 2016/2017 session.”
South Sudan’s cabinet wants to almost triple spending in the next budget, as it hopes to stabilise the fledgling country that has flirted with civil war.
However, with earnings from its main asset – oil – heavily disrupted, it was unclear how the government could finance such a level of spending.
The cabinet approved a budget proposal for the 2016/17 fiscal year that caps government spending at 29.6 billion South Sudan pounds ($520 million), a 187 percent rise over the year that ended on June 30.
The world’s newest country has been ravaged by war since December 2013, when soldiers loyal to President Salva Kiir clashed in the capital Juba with troops loyal to his former deputy Riek Machar.
A shaky peace deal was agreed a year ago, but it was frequently violated.
Machar returned to Juba as deputy president in April but Kiir appointed a new deputy to replace him in late July, when he left the capital after street battles between rival troops.
The fighting has hurt oil production, a major source of revenue, which has also been hit by falling prices. The economy has been battered, driving prices higher. Inflation has surged in July to reach an annual rate of 661.3 percent.
“This (budget) increase, estimated to be 187 percent, comes of course as a result of so many factors including the implementation of the (peace) agreement,” Michael Makuei, Information Minister and Government spokesman, told a news conference late on Wednesday.
“Objective number one was the consolidation of peace by prioritising the financing of the agreement. Number two, to restore confidence in local markets by improving key economic indicators: economic growth, employment, inflation and exchange rate,” Makuei said.
Makuei said the ceiling was a proposal and the finance ministry and other ministries would work out the final details before the budget is brought to parliament for approval at a date yet to be decided.
He did not say what the sources of funding would be but in the past oil has accounted for most of its revenues. Juba has also taken loans from Chinese companies, offering to pay them back with future oil proceeds.
Earlier this month, Foreign Minister Deng Alor said the country planned to ask China for a $1.9 billion loan – a sum equal to more than a fifth of its national output – to be used for infrastructure projects such as roads and bridges.
($1 = 56.90 South Sudanese pounds)
(Writing by George Obulutsa; Editing by Elias Biryabarema and Toby Chopra)