Cabinet resignations in S. Africa unsettle markets

The African National Congress, this nation’s governing party, scrambled Tuesday to restore investor confidence after the resignations of 11 Cabinet ministers and three deputies triggered shocks in the financial markets.

Analysts and opposition leaders warned of a damaging governmental crisis, but late in the day, ANC Secretary-General Gwede Mantashe issued a statement indicating that five of the Cabinet members, including the respected finance minister, would join the next government if asked.

The initial statement on the resignations came from the office of outgoing President Thabo Mbeki, whose spokesman said he accepted the resignations “with regret.”

Mbeki was driven from office by the ANC over the weekend after a high court judge found he might have interfered in the fraud, graft and racketeering case of his political rival within the ANC, party leader Jacob Zuma. Mbeki has strongly denied any interference.

The resignations were a rebuff to Zuma, who Monday had called on all Cabinet ministers to stay. But the departure of Mbeki loyalists was not unexpected.

The resignation of Finance Minister Trevor Manuel, who later indicated he would be willing to join the next government, caused a sharp dip in the rand, the nation’s currency, to 8.217 per dollar from 7.99 before it recovered slightly.

Financial analysts said the uncertainty surrounding the resignations caused confusion and, at times, panic. Others said the resignations, coming amid global financial instability, were mishandled and indicated the serious rifts remaining in the ANC.

“There is no crisis,” Mantashe said. He said the ANC’s move to clarify the Cabinet departures was “a sign of an organized organization.”

Despite Zuma’s insistence Monday that there was no bad blood between him and Mbeki, whom he called a “brother” and comrade, political science professor Sheila Meintjes of Witwatersrand University said there was clearly vindictiveness in the party.

“I think they are all dissembling to suggest that there is not a fight between brothers. There’s nothing worse than a fight between brothers. Sometimes it’s to the death, although here we are talking about political death,” she said. “There’s been a lot of blood on the carpet between Zuma and Mbeki, and both have always tried to put a spin on it.”

Elizabeth Sidiropoulos, director of the South African Institute of International Affairs at Witwatersrand University, said that although it could be expected that ministers appointed by Mbeki would offer to step down, the mass resignations were “a bit of a shock.”

“Certainly in this globally difficult time, the last thing you need is this downturn compounded by domestic instability,” Sidiropoulos said, adding that Manuel’s promise to continue was a positive step that would help calm fears.

According to some analysts, a more serious blow to the ANC could be Mbeki’s plan to appeal the Sept. 12 judgment by high court Judge Chris Nicholson that Mbeki may have interfered in the legal proceedings against Zuma.

If Mbeki wins, it would leave the Zuma camp in the invidious position of having forced Mbeki’s departure on an unsubstantiated inference -- while the allegations against Zuma, who is expected to run for president next year, remain untested in court.

Zwelethu Jolobe of the University of Cape Town said such a ruling would have “a huge impact” on the ANC.

“It would further cause a rift because there are many parliamentarians and many senior members of the party who support Mr. Mbeki and who are angry at the way he was removed,” Jolobe said.

“And how this could play itself out could be quite ugly, given that there’s an election coming up.”

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robyn.dixon@latimes.com