The Banking Association South Africa (BASA) notes the announcement by the National Prosecuting Authority regarding the allegations against the Minister of Finance Pravin Gordhan and its decision to issue a summons to Minister Gordhan, former Sars commissioner Oupa Magashula and former deputy Sars Commissioner Ivan Pillay.
BASA is fundamentally concerned with the timing of this decision especially since Minister Gordhan has just returned from yet another investor roadshow to the USA wherein he has been promoting South Africa and the resilience of our economy and soundness, independence and stability of our key institutions. Moreover, the Minister has also been meeting with various ratings agencies at this time, which will continue well into November to guard against any possibilities of a downgrade.
We have seen an immediate negative impact as a result of the announcement. The rand weakened by 2,93% immediately after the announcement and the banking index dropped.
According to Mr. Cas Coovadia, MD of BASA: “We reiterate our previous position on this matter and remain absolutely clear that the law must take its course and the proceedings related herewith must be dealt with in an appropriate and responsible manner so as to not unduly and negatively impact on the economy and what Minister Gordhan has achieved to date to restore investor confidence and concrete measures to reignite economic growth.”
While BASA will not comment on the merits of the case and allegations in this regard, we are deeply troubled by this announcement and wish to reiterate our support and appreciation for the leadership and direction shown by the Minister of Finance, his commitment, the work he has undertaken and what he has been able to achieve thus far within a turbulent environment and under extreme pressure. We also emphasise the Minister has been able to achieve positive outcomes in a difficult situation because he has behind him an excellent team in National Treasury. I saw first-hand how professional, committed and hard-working this team is when I was on the roadshow with them earlier this year.
Based on our engagements and interactions with Minister Gordhan and the National Treasury under his leadership, we remain confident in him and the team and reaffirm our support for both the abilities of Minister Gordhan and the National Treasury, says Coovadia. We also remain confident about their commitment to the national interest and growing our economy to benefit all our people.
Credit: CNBC Africa