Cabinet chaos raises junk status risk for South Africa

Significance

He replaces the little known David van Rooyen, who had been in post for only four days following the axing of technocrat Nhlanhla Nene. The nature of the latter's removal shook investor confidence unprecedentedly for post-apartheid South Africa.

Impacts

• Economic turmoil caused by Nene's axing could embolden ANC factions pushing for Zuma to resign before the next poll in 2019.
• However, Zuma may use his hold on the intelligence agencies to undermine opponents, eg by uncovering personal scandals.
• Expected monetary policy tightening by the US Federal Reserve will likely undermine any rand appreciation caused by Gordhan's appointment.
• Recent student protests could encourage Zuma to dismiss Higher Education Minister Blade Nzimande, weakening the SACP.