JOHANNESBURG • South African President Jacob Zuma says the country's fiscal policies will not change and people should remain calm, after its credit rating was cut to junk following a political reshuffle that he defended as bringing new blood into the Cabinet.
However, the African National Congress-allied (ANC-allied) Cosatu, South Africa's largest trade union, said Mr Zuma must step down after his change of finance ministers triggered the credit rating downgrade.
In his first public remarks about Thursday's midnight reshuffle, Mr Zuma yesterday also urged his Cabinet to reach out and reassure international investors, following the dismissal of former finance minister Pravin Gordhan.
Mr Gordhan's sacking has outraged opponents and some political allies of Mr Zuma, undermining his authority as President, and threatens to split the ANC, which has governed South Africa since the end of apartheid. Mr Gordhan has been seen for some time by pundits as the target of political pressure from an ANC faction allied to the President.
"With regards to the finance portfolio, we reiterate that, while the political leadership has changed, the government's overall policy orientation remains the same as derived from the governing party, the African National Congress," Mr Zuma said.
"We expect the changes to add renewed energy into the Cabinet and the executive as a whole," he said, referring to the Cabinet reshuffle, which he said had added "many young ministers".
The departure of Mr Gordhan, a totem of policymaking stability for many foreign investors, has rocked the rand and other local assets.
His sacking and that of former deputy finance minister Mcebisi Jonas were also cited by S&P Global Ratings as a reason for its cut in South Africa's credit rating on Monday to BB+, below investment-grade and implying higher borrowing costs.
Thanking Mr Gordhan and Mr Jonas, Mr Zuma said his government remains committed to measured fiscal consolidation that stabilises rising public debt, but would also aim to radically transform the economy to include the black majority.
"We thus remain firm in our call that the economy needs to include the black majority in the ownership and control," he said.
Mr Zuma urged calm, saying public disagreements within the government "demoralise our people and create confusion". This was a "serious weakness and we shall attend to it within renewed vigour", he said.
But Cosatu said it no longer believed in Mr Zuma's ability to lead the party and the country, and that it wanted to restructure its alliance with the ANC.