South Africa’s finance minister faces a fraud charge and has been asked to appear in court on Nov. 2, the country’s top prosecutor has said on Tuesday, deepening the uncertainty about the weak economy and the leadership of President Jacob Zuma.
South Africa’s currency, the rand, dropped about 3 percent after the announcement of the move against Finance Minister Pravin Gordhan, who has been widely praised for his stewardship of the economy and is scheduled to give a budget speech on Oct. 26.
The Democratic Alliance, the main opposition party, described the move to prosecute Gordhan as “a disaster for the economy.”
Gordhan will be prosecuted for illegally approving an early retirement package for a former tax official who then continued to work, said Shaun Abrahams, head of the National Prosecuting Authority. He also said a police probe continued into an allegedly unauthorized unit set up years ago at the country’s tax agency to investigate financial wrongdoing at a time when Gordhan led the agency.
While Abrahams said the case against Gordhan was not politically motivated, the market jitters following his announcement echoed similar nervousness over the economy and political leadership late last year.
At that time, Zuma fired Finance Minister Nhlanhla Nene and replaced him with a relatively unknown figure who was not considered a strong candidate for the job. The currency plummeted in response and Gordhan, who had been finance minister from 2009 to 2014, was brought back to the post to try to restore confidence in the economy.
Meanwhile, the head of South Africa’s state watchdog agency is working on a preliminary report on whether the Guptas, an Indian immigrant family with close ties to Zuma, sought to influence the selection of some Cabinet ministers. Zuma denies he was swayed in his selections.
