Who could be South Africa’s new Finance Minister?

It’s still not patently clear why President Jacob Zuma recalled Finance Minister Pravin Gordhan from his UK trip. However, there are rumours swirling that a reshuffle at the Finance Ministry is imminent because relations between the President and Gordhan have become irretrievably strained.

Here Nomura highlight six potential candidates that could replace Gordhan or ultimately find some sort of high profile position in the Finance Ministry:

1. Brian Molefe:Nomura believes the ex-CEO of Eskom is the most likely candidate to replace Gordhan. However, there are serious questions over his relationship with the Guptas after previous supportive media comments on them, as well as issues around tendering and patronage at Eskom and the Public Protector report case against him. But Nomura points out that his positive tenure at the helm of Transnet and his history at the National Treasury should not be discounted. “His name was widely touted as a possible to take over the position last year. The Zuma camp would likely promote his previous experience at the NT,” says Noumura.
2. Des Van Rooyen:Zuma’s ‘weekend special’. Van Rooyen got this unflattering nickname after taking over briefly after Zuma axed Nanlha Nene as Finance Minister. Nomura say he is now less likely to get the role given the market reaction the last time he was in the role. However, they add that his appointment to the head of Treasury is still a possibility or he may get another economic position in a reshuffle. He’s currently Minister of Cooperative Governance and Traditional Affairs, but he can’t seem to shake the reputation of being a ‘Gupta deployee’.
3. Sfiso Buthelezi: Nomura says this businessman is a possible candidate to take over from Pravin but that it’s difficult to gauge market reaction to this would be should this become a reality. He is a businessman believed to be close to Jacob Zuma who was previously touted to become new Deputy DTI Minister or Deputy Finance Minister. “Very little known [is] about him,” says Nomura.
4. Kgosientsho Ramokgopa: He has a lot of political experience and was the former Mayor of Tshwane. However, he’s now out of a job. Nomura expects Ramokgopa to have a moderate chance of success and also feel it would be difficult to gauge market reaction, should he get the top spot. “We believe he has shifted from being in anti-Zuma camp to Zuma camp and is seen as a capable pair of hands technically from time in Tshwane,” says Nomura.
5. Makhosi Khoza: She’s currently the Public Service and Administration Portfolio Committee’s chairperson and was a former member of the parliamentary finance committee. She recently received death threats after visiting a hospital in Mpumalanga and pointing out problems in the province’s healthcare sector. While she may be vocal on public health Nomura still believes she is a loyal supporter of the President. She may not earn the top seat in this reshuffle but could well land a place in the Ministry.
6. Nkozosana Dlamini-Zuma: Nomura thinks the President’s ex-wife won’t necessarily become finance minister but could instead get a position in the Ministry.She would bring with her some experience as the former Health and Home Affairs Minister and AU President. She is currently a candidate for President of ANC. “While we think she could be in contention the whole point of her entering parliament is that she needs a high profile role that has a low workload so she can go out and campaign. The position of Finance Minister definitely wouldn't offer that; a new minister in the Presidency for Transformation, say, could be more appropriate,” points out Nomura.

Nomura adds: “The problem, we believe, is that any replacement would be appointed with the express view to facilitate tenderpreneurship and patronage. There would be no point in doing this or taking such risks otherwise just to put a market-credible figure in place. The two key boxes that need ticking are a candidate that is fiscally conservative and anti-patronage (that would uphold the PFMA). We don’t believe any of the above candidates tick both boxes. Ultimately, we think too much ground work has been done inside the ANC and with opinion formers on Brian Molefe, hence he remains our baseline to enter the NT in some capacity if a reshuffle does occur.”

While a reshuffle is on the cards, Nomura does not expect fiscal policy to shift significantly after it. Indeed, the expenditure ceiling could even survive. “We do not believe the Zuma faction cares about fiscal policy that much as a macroeconomic lever. Instead, we think it is concerned about issues like procurement regulations, NT oversight of parastatals, NT blocking contracts for politically connected people, and access to funds at PIC, IDC. These are the issues that matter to the Zuma faction more than the fiscal situation,” says Nomura.