Zuma moves Manuel to powerful new role

President Jacob Zuma has kept South Africa’s former finance minister at the heart of policy-making in his first Cabinet by appointing Trevor Manuel to head a powerful new planning body.

A day after taking office, Zuma named tax authority chief Pravin Gordhan to replace Manuel in another sign of continuity as Africa’s biggest economy heads towards its first recession in 17 years, Reuters reports.

“I think the positions that the financial markets were worried about have been skilfully handled,” said independent analyst Nic Borain.

Manuel had been in the job for 13 years, making him the world’s longest-serving finance minister. Investors approved of the tight monetary and fiscal policies he kept in place.

“Comrade Trevor Manuel has been given a new structure, a very powerful structure that is going to work out a national plan of government,” said Zuma, who expects a positive financial market reaction to Gordhan’s appointment.

As well coping with the fallout from the global financial crisis, Zuma also faces pressure to deliver on 15 years of promises by his ruling African National Congress (ANC) to tackle widespread poverty, crime and AIDS, and create jobs.

The ANC won an election landslide on April 22, keeping the dominance it has enjoyed since the end of apartheid in 1994. Zuma made his way to the presidency despite facing trials for rape and corruption. All the charges were dropped.

His toughest task may be balancing the interests of unions and communists who helped him rise to the top against those of investors who fear he will steer the economy to the left.

Some of the more vocal left-wingers found places in the cabinet, but not holding key economic portfolios.

South African Communist Party General-Secretary Blade Nzimande was named minister of higher education and training.

“He certainly put his own staff on the cabinet, which I think is a good thing,” said Nel Marais, acting managing director at Executive Research Associates.

“There are quite a few strong new faces in the cabinet that played a significant role in Zuma’s political fight for survival in the past few months.”

Zuma also reached out to Afrikaners, many of whom feel excluded 15 years after the end of white minority rule. He named a deputy agriculture minister from the Freedom Front, which explicitly aims to protect Afrikaner interests.

Opposition Democratic Alliance leader Helen Zille criticised the appointments. “With few exceptions, President Jacob Zuma’s new cabinet is bad news for South Africa,” she said.

Top businessman Tokyo Sexwale, who returned to politics two years ago, became minister of human settlements.

But Zuma left out Winnie Madikizela-Mandela, who is back in parliament after a fraud conviction. The ex-wife of Nelson Mandela had been tipped for a cabinet post despite being seen by many as a divisive figure.

Possibly in a sign of tougher measures against violent crime before next year’s soccer World Cup finals in South Africa, Zuma created a new ministry specifically for the police.

Zuma named his predecessor Kgalema Motlanthe as his deputy. Motlanthe had served in a caretaker role since Zuma’s rival, former President Thabo Mbeki, was forced from office last September by the ANC.

Although markets were expected to welcome the key economic appointments, some pundits questioned how effectively Manuel’s new planning commission and another new economic ministry would work with trade and finance ministries.

“All those, plus deputies, will be fighting for the same bowl. Coordination from that point of view is going to be hugely problematic,” said Marais.