Zuma appoints third finance minister in a week

He replaces relatively unknown politician, David van Rooyen, who was installed in place of his predecessor Nhlanhla Nene last week.

The latest move sent the rand up nearly five per cent on Sunday night.

Markets have reacted with cautious optimism to President Jacob Zuma’s appointment of Pravin Gordhan as South Africa’s new Minister of Finance – the third minister to hold the key portfolio in four days.

“Critics would say having a finance minister serving only two days doesn’t bode well for the reputation of South Africa”, said Mohammed Nalla, head of research at Nedbank Capital.

“The president’s willingness to change an earlier deployment in the face of our sluggish economic climate and representations from role players demonstrated bold leadership”, the National Working Committee, a group of mostly top ANC officials, said in a statement after it met on Monday.

In a statement, party leader Mmusi Maimane said while Parliament is only expected to re-open in February next year, the matter needs to be addressed urgently as “the nation has entirely lost trust in Jacob Zuma as President”.

Nomura analyst Peter Montalto said that it was opposition within the ANC that pushed Zuma to back down over Van Rooyen, who was widely viewed a weak placeman.

However, despite the mini-rally following Gordhan’s appointment, investors said the rand and South African bonds were unlikely to recover further to levels seen before Nene’s departure.

Life in South Africa may be many things, but boring is not one of them. “So, it’s not as if we didn’t sit down and think through who this person is, what it would be like, how the country will reflect and so on”, she said. Van Rooyen will take over from Gordhan as minister for cooperative governance and traditional affairs.

The dramatic U-turn focused attention on Zuma’s standing within the African National Congress (ANC) party, which has ruled since the end of apartheid in 1994 but has been losing public support.

A selling frenzy in South Africa’s markets triggered by last week’s events wiped almost $11bn (£7bn) off the value of shares.

“I can confirm that there was never any talk of a recall”, he said.

Zuma acknowledged that he had given in to the condemnation of investors and political opponents, who called the series of changes in the finance ministry indicative of his reckless management of an economy in turmoil.

On Sunday, speaking to crowds of ANC supporters, Zuma dismissed the criticism as coming from “people who talk a lot on TV”, according to the local news media.