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Gigaba pursues radical transformation of economy

South Africa’s new finance minister, Malusi Gigaba, that said that he would pursue radical transformation of its economy while defending the country’s investment-grade credit rating in his first comments after the divisive firing of his predecessor by President Jacob Zuma.

Mr Gigaba, formerly home affairs minister and a close ally of Mr Zuma, became the fourth Treasury chief in two years this week after the president used a midnight reshuffle to sack Mr Gordhan, who repeatedly clashed with him over cronyism in state-owned companies.

We are committed to maintaining an investment-grade rating

His appointment has been met by a backlash inside the ruling African National Congress, over concerns that the president is seeking a more pliant minister and speculation that the Guptas, a business family who are Mr Zuma’s friends, will benefit from the reshuffle.

In a press briefing in the capital, Pretoria, on Saturday, Mr Gigaba said: “I am fully aware that we are at a highly politicised, polarised and contentious moment in the history of our young democracy.”

“I will not be distracted by issues that are not relevant to the task at hand — accelerating radical economic transformation,” he said, referring to greater state intervention aimed at increasing black ownership of the post-apartheid economy and redistributing land.

“For too long, there has been a narrative or perception around Treasury, that it belongs primarily and exclusively to ‘orthodox’ economists, big business, powerful interests and international investors,” Mr Gigaba added.

He said that he was “unapologetic about using the state’s spending power to grow black enterprises,” but added that the Treasury would remain “committed to a measured fiscal consolidation that stabilises the rise in public debt.”

Mr Gordhan, who was appointed to the Treasury in 2015 after Mr Zuma botched the abrupt replacement of a previous finance minister, sought to restrain spending to keep rating agencies from cutting the country to junk status.

With South Africa’s investment-grade rating at risk over the forced departure of Mr Gordhan, Mr Gigaba said he had already been in discussions with Moody’s and Fitch Ratings and would speak to Standard & Poor’s shortly about averting a downgrade.

“We are open to [rating agencies] and accessible to them.” Mr Gigaba added. “We are committed to maintaining an investment-grade rating.”

Dissent over Mr Zuma’s reshuffle continued to grow over the weekend, with the South African Communist Party, the ANC’s partner in government, calling on Mr Zuma to go before Monday, or it would join a no-confidence vote in parliament against him that is being planned by the opposition.

“Increasingly our country is being ruled not from the Union Buildings [the official seat of South African presidents] but the Gupta family compound,” the SACP said on Friday.

“The negative public narrative about my appointment is more about the removal of my predecessor than about my abilities,” Mr Gigaba said.

Mr Gigaba asked South Africans to “judge me on my actions in the coming months, not rumours and speculation.”

Via FT