Rand drops on Zuma’s surprise ‘pro-nuclear’ Cabinet reshuffle

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Cape Town – The rand lost more than 0.5% within minutes of President Jacob Zuma’s announcement of yet another surprise Cabinet reshuffle.

The biggest move is that of energy – Mmamoloko Kubayi has been moved from the energy portfolio to communications, with David Mahlobo now occupying the position of Minister of Energy.

Other changes include Hlengiwe Mkhize moved to Minister of Higher Education and Training while Ayanda Dlodlo is the new Minister of Home Affairs, Bongani Thomas Bongo is the Minister of State Security and Buti Manamela is the Deputy Minister of Higher Education and Training.

Desperate attempt to force through nuclear deal?

Currency dealers at TreasuryOne questioned the energy portfolio reshuffle, citing “a possible new nuclear deal trying to be pushed through”.

“This is all about the nuclear deal. David Mahlobo has accompanied the president on visits to Russia, presumably to lay the ground for the Rosatom nuclear deal,” said Lawson Naidoo of the Council for the Advancement of the South African Constitution.

Safcei spokesperson Liz McDaid said: “Since our court victory, there has been nothing happening regarding the outcome for the nuclear programme. We suspected something was happening behind closed doors. Last Friday’s nuclear site authorisation and now today’s Cabinet reshuffle has seen the intelligence minister become the energy minister. This is a desperate attempt to force through the nuclear deal.”

By 10:59 the local unit was trading at R13.37 to the US dollar, from an overnight close of R13.31 and intra-day low of R13.29/$. The unit immediately spiked to R13.39 against the greenback on the reshuffle news.

Political analyst Daniel Silke told Fin24 in an emailed response for comment that there are two aspects to the latest Cabinet reshuffle. “Firstly, Mahlobo is seen as close to Zuma and someone
who can drive the nuclear deal, so I agree that it is relevant. The second part is
the axing of Blade Ndzimande and the demise of SACP representation at a senior
level in the Cabinet.

“While the nuclear deal might play a role on the
one hand, Zuma is clearing out his political enemies with Ndzimande’s departure
as well. The reshuffle is likely to stoke the strains in the Alliance although it is
an indicator that Zuma now barely cares about the role of the SACP,” he said.

More updates to follow.

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