South Africa Cabinet walk-out hits shares

South Africa’s finance minister resigned along with most leading Cabinet members today in the wake of president Thabo Mbeki’s departure.

South Africa’s finance minister resigned along with most leading Cabinet members today in the wake of president Thabo Mbeki’s departure.

Trevor Manuel tried to reassure a shaken business community and stock market by saying he was willing to serve the country’s new administration.

He held the post for 11 years and is credited with steering South Africa to economic stability.

A spokesman for President Mbeki said Mr Manuel, his deputy Jabulani Moleketi, eight other Cabinet ministers and three deputies quit following Mr Mbeki’s weekend removal by the ruling African National Congress.

The rand and stock market dropped on the news.

Mr Manuel’s spokeswoman quickly released a statement saying that he and his deputy “want to make it clear that they are ready to serve the new administration in any capacity that the incoming president deems fit.”

Mr Manuel had previously indicated he would serve the new administration and market reaction to Mr Mbeki’s dismissal had been muted because of the feeling that there would be continuity and stability.

ANC leader Jacob Zuma is seen as the real power in South Africa now despite needing to win elections next year – and put a corruption scandal behind him - to claim the actual title of president.

Business has been jittery about Mr Zuma, an Mbeki rival seen as owing his rise to support from labour and the South African Communist Party

Nine of the 10 ministers who resigned belonged to the ANC – a measure of the backlash caused by Mr Mbeki’s surprise firing. They include the ministers of defence, intelligence, public enterprises and public services as well as local government and housing minister Sydney Mufamadi, who was the key mediator in Zimbabwe’s political crisis.

Mr Moleketi, the deputy finance minister, is in charge of the finances for the 2010 Soccer World Cup in South Africa.

The news came after the ANC said that its moderate and conciliatory deputy leader Kgalema Motlanthe would take over as interim head of state on Thursday.

Deputy President Phumzile Mlambo-Ngcuka heads the country’s national AIDS council and her departure would be a big blow to the efforts to tackle the epidemic. South Africa has the highest number of people with the AIDS virus in the world.

The much-criticised Minister of Health, Manto Tshabalala-Msiming, unpopular because of her espousal of beetroot, garlic and lemon to fight AIDS, was among the few ministers who indicated they would stay.

Opposition parties voiced alarm at the mass resignations but gave a cautious welcome to Mr Motlanthe’s nomination.

“Over the past year Mr Motlanthe has been one of the few voices of reason in the ANC,” said Patricia de Lille, leader of the small Independent Democrats.

Born in 1949, he was influenced by the anti-apartheid Black Consciousness Movement of Steve Biko, who was killed by apartheid police in 1977.

Mr Motlanthe was detained during student protests in 1976, and arrested again the next year and sentenced to 10 years in prison. On his release, he joined the National Union of Mineworkers.

Archbishop Desmond Tutu – considered South Africa’s moral conscience - described him as “a conciliatory person who appears to want to act out of integrity.”

Tutu and others have warned that a Zuma presidency could jeopardise South Africa’s international standing.

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