Consequences of Gordhan being charged

Legal action against Finance Minister Pravin Gordhan may lead to disastrous consequences for South Africa, said Debt Rescue CEO Neil Roets.

Legal action against Finance Minister Pravin Gordhan may lead to disastrous consequences for South Africa, said Debt Rescue CEO Neil Roets.

Downgrades by all three ratings agencies before the end of 2016 and a significant weakening of the rand were two strong possibilities, due to the legal action.

Gordhan has been summonsed to appear in court by the NPA on charges of fraud.

EWN reported that Gordhan’s fraud charges relate to the early retirement of his former Sars deputy Ivan Pillay.

Interest rates will go up

Roets said the weakening of the rand will lead to an interest rate hike by the Reserve Bank, which will have “devastating consequences for South Africa’s millions of deeply-indebted consumers”.

“There is no doubt in my mind that we are going to see a substantial rise in consumers who default on their repayments.”

“This summons has nothing to do with the matter relating to the rogue spy unit at Sars, which may also end up in court later this year,” said Roets.

Economist Dawie Roodt said the decision by the government to charge Gordhan was an effort by Jacob Zuma to get rid of the finance minister.

This was because “he made it difficult for the president and his cronies to get their hands on the country’s purse strings”.

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