Finance Minister Pravin Gordhan is considered a key figure for markets and investors. Dr Azar Jammine, Chief Economist Econometix, paints a bleak scenario if the Finance Minister were to leave because of the Hawks investigation.
It is critically important, especially in light of the events of the past year where there has been growth in concerns of state capture.— Dr Azar Jammine, Chief Economist Econometix
Allied concerns would be over credit ratings agencies looking very closely at what is happening in terms of our ability to control government fiances, added Jammine
We have to nip it in the bud and Pravin Gordhan has been in the forefront of attempts to do that.— Dr Azar Jammine, Chief Economist Econometix
If not, it would cause a worse market meltdown than last December.
Gordhan has built a very strong team around him, and Jammine says they would likely just depart if Gordhan was no longer there.
jammine says the worst case scenario of Gordhan departure would see the rand plummet fuurther, infaltion rocket, interest rates rise, cosumers suffer even more and an economy that would spiral downward into severe recession.
He says if the situation is of a more long term nature between Girdhan and the hawls, it would create longer term uncertainty which could have an ironic positive spin off.
Uncertainty would cause the rand to remain depressed and exporters can take advantage of that.
Listen to the full interview below: