The markets need transparency around Gordhan saga to keep rand stable

After days of economic and political volatility, over the probe into Finance Minister Pravin Gordhan, News24 reported that Gordhan has now told his Treasury staff that he is being attacked by the Guptas because of the work his department has been doing.

Brett Birkenstock, Overberg Asset Management director, joins Africa Melane on the Weekend Breakfast Show to talk about what this means for the country.

The Finance Minister has the backing of foreign investors and global investors, and of course the Ratings Agencies Standard & Poor, Moody's and Fitch. So there is a lot of respect and trust based on his actions

Brett Birkenstock, Overberg Asset Management director

At the moment we are seeing a deviation from belief and confidence in the country to be able to implement fiscal prudency and also have economic growth which are the cornerstones of us not being downgraded in December, he added.

He did not choose to delve into speculation about what or who is attacking the finance minister.

It's felt like deja vu this last week, taking us back to the 'Nenegate' incident last year in December"

Brett Birkenstock, Overberg Asset Management director

He says it does seem that some members of the South African government would like direct control over the State Owned Enterprises (SOEs).

A weaker rand followed this week's summons of Gordhan by the Hawks for questioning. He says it's not good news for South Africans.

We are a net importer of food, and we are in competition with foreign markets for produce

Brett Birkenstock, Overberg Asset Management director

So a weaker rand means other countries can pay more. And this affects our local food producers. Imports become more expensive, petrol and transport prices increase.

It puts local businesses under pressure, which causes further inflation.

Brett Birkenstock, Overberg Asset Management director

This could all lead to further riot action and service delivery protests., and says transparency on all these matters around Gordhan is what is required to make the markets happier and instil confidence.

Listen to the interview below:


This article first appeared on 702 : The markets need transparency around Gordhan saga to keep rand stable


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