South Africa's Zuma Denies `War' With Finance Minister

  • Relationship between minister and tax boss being dealt with
  • ANC has `full confidence' in Gordhan as finance minister

South African President Jacob Zuma denied he’s “at war” with Finance Minister Pravin Gordhan over the leadership of the nation’s tax agency and said the minister’s position isn’t in jeopardy.

“The President wishes to emphasize that minister Gordhan remains the Minister of Finance and any positing that the position of the minister is under any threat is dismissed,” his spokesman Bongani Majola said in an e-mailed statement on Monday. Reports that Zuma and Gordhan are in conflict are “a total fabrication and mischievous sensationalism,” he said.

Gordhan said on Friday that Tom Moyane, the South African Revenue Service commissioner Zuma appointed in 2014, showed “totally unacceptable” behavior by defying orders to halt a management and systems overhaul. He threatened to resign after Zuma told him that Moyane should keep his post, Johannesburg’s Business Day newspaper reported, citing unidentified government sources.

“The difficulty in the relationship between the Minister of Finance and the SARS
Commissioner is being dealt with through the correct channels, using the correct legal prescripts,” Majola said. “Measures are being put in place to address the issues responsibly and amicably.”

The rand gained 2.4 percent to 15.7940 per dollar by 6 p.m. in Johannesburg on Monday, after plunging 3.5 percent on Feb. 26. The yield on rand-denominated government bonds due December 2026 fell less than one basis points to 9.42 percent.

Gordhan’s Support

Widely respected among investors, Gordhan also enjoys some support from opposition parties and the African National Congress, with the ruling party Friday expressing “full confidence” in him and his efforts to restore faith in Africa’s second-biggest economy.

“There are no talks of recalling the Minister of Finance at Luthuli House,” Johannesburg-based New Age newspaper reported, citing ANC Treasurer General Zweli Mkhize. Luthuli House is the ANC’s headquarters.

Zuma reappointed Gordhan as finance minister, a post he had held from 2009 to 2014, in December after his decision to replace Nhlanhla Nene with little-known lawmaker David van Rooyen sparked a selloff in the rand and the nation’s bonds.

The Revenue Service has suffered a spate of resignations since Moyane took office and local newspapers reported on a range of allegations of wrongdoing by executives who served during Gordhan’s tenure as commissioner of the authority between 1999 and 2009. A special branch of the South African Police Service wrote to Gordhan to find out what he knew about a “rogue unit” within the tax agency that spied on political leaders, including Zuma, Business Day said.

The police unit’s letter “is an attempt by some individuals who have no interest in South Africa, its future, its economic prospects and the welfare of its people,” Gordhan said in an e-mailed statement on Friday. “If necessary, I will take appropriate legal action to protect myself and the National Treasury from whatever elements seeking to discredit me, the institution and it integrity.”

(A previous version of this story was corrected to show that Nhlanhla Nene was replaced as finance minister in December)

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