President Jacob Zuma fired five ministers and 10 deputy ministers from his cabinet in a major reshuffle which the governing ANC party has criticised.
South Africa's President Jacob Zuma sacked five ministers and 10 deputy ministers late on Thursday in a major cabinet reshuffle following days of speculation that had jolted the country's markets and currency.
The most high profile scalp was that of Pravin Gordhan, who was sacked as finance minister.
The impact of the reshuffle on markets was immediate. The rand dropped as much as 2.4 percent in a fifth straight session of losses before regaining some ground against the dollar. It is poised for a weekly loss of nearly 8 percent — its worst week in 15 months.
Local bonds were hit hard, with yields in the benchmark flirting with the 9 percent mark while Eurobond yields soared across the curve.
The sacking of Gordhan, seen as a steady and reliable hand in policymaking by investors, came as part of a wider cabinet reshuffle, the latest chapter exposing deepening rifts and divisions within the government of Africa's most industrialised economy.
Zuma shrugged off pressure from within his own party, the opposition as well as the business circles to keep Gordhan as finance minister.
Gordhan has been replaced with Home Affairs Minister Malusi Gigaba.
Zuma had also appointed lawmaker Sfiso Buthelezi as deputy finance minister replacing Mcebisi Jonas.
The sacked ministers are: Finance Minister Pravin Gordhan, Energy Minister Tina Joemat-Peterson, Transport Minister Dipuo Peters, Public Service and Administration Minister Ngoako Ramatlhodi, and Tourism Minister Derek Hanekom.
Other changes in the cabinet affect ministries such as energy, police, tourism, and others.
Zuma brought in new faces and shuffled some ministers.
Speculation over cabinet changes began when Zuma called a meeting of the ruling African National Congress' top officials on Thursday evening.
"I have directed the new ministers and deputy ministers to work tirelessly with their colleagues to bring about radical socioeconomic transformation and to ensure that the promise of a better life for the poor and the working class becomes a reality," Zuma said.
South Africa's new ministers and deputy ministers will be sworn in at 1600 GMT on Friday.
Protests against move
South African Deputy President Cyril Ramaphosa criticised the cabinet purge and said the sacking of Pravin Gordhan was "unacceptable."
"I have made my views known (to Zuma) and there are quite a number of other colleagues and comrades who are unhappy about this situation," Ramaphosa told reporters.
Opposition parties have called upon the people of South Africa to stage peaceful protests across the country against the move.
Earlier, the ANC-allied Communist Party (SACP) said it objected Gordhan's removal, while two of the main opposition parties, the Democratic Alliance and Economic Freedom Fighters, said they would call for a vote of no-confidence against Zuma.
For the second consecutive day, the influential ANC Youth League, however, issued a statement on Thursday backing Zuma's planned cabinet changes.
"New chapter" in Gordhan's life
Gordhan said upon his arrival on Tuesday that he was still finance minister after being recalled from an investor tour in London by Zuma.
On Wednesday, he said he would "open a new chapter" of his life if sacked.
Gordhan first served as finance minister from 2009 to 2014 and was brought back by Zuma in December 2015, to calm markets spooked by the president's decision to replace his successor, Nhlanhla Nene, with a little-known politician.
Opposition leader Mmusi Maimane, leader of the Democratic Alliance, urged resistance to Zuma's decision to fire Gordhan and Jonas.
"We cannot sit by and let this happen," he said.
Risks to economy
Africa's most industrialised economy faces the risk of being downgraded to junk status owing to weak economic growth. The economy grew by 0.3 percent in 2016 versus 1.3 percent in the previous year.
"The little that we know at the moment is that it's probably not good news for the markets because Gigaba doesn't have any real finance experience," said Noelani King Conradie, managing director at NKC African Economics.
"This definitely raises the risk of rating downgrades and it is going to continue the uncertainty about future economic policies," she said.
South Africa's Banking Association also said that changing the finance minister and deputy finance minister raised "alarming concerns" for fiscal discipline issues.
The association's Cas Coovadia says Zuma's "actions have put our country into turmoil at a time the country is trying to come together to address the problems we face. We have no choice but to say this reshuffle is not in the best interests of the country. We are also left with little choice but to question the motives behind this action."
Zuma considering stepping down?
Zuma is also considering an offer to step down next year, at least 12 months before his term ends, in a deal with his opponents in the party, two senior sources said on Thursday.
On Wednesday, sources within the ANC said there was a split down the middle among its six most senior officials over whether Gordhan should be sacked.
Julius Malema, leader of the ultra-left Economic Freedom Fighters and a former protege of Zuma, filed a court application for disciplinary or impeachment proceedings against the president on Thursday.