S.Africa's Gordhan worried about capital inflows

South African Finance Minister Pravin Gordhan speaks at a news conference during the annual IMF-World Bank meeting at the IMF headquarters building in Washington October 7, 2010.

South African Finance Minister Pravin Gordhan said on Tuesday he was concerned about the rapid movement of capital inflows and said such large flows were having an impact on South Africa and other countries.

"In addition to concerns about the global recovery ... there's an additional factor... The rapid movement of huge capital flows around the world, which has an impact particularly on the currencies of developing countries like South Africa," Gordhan said at a news conference, ahead of his departure for a G20 summit in South Korea.
Gordhan said measures to handle capital inflows had to be found locally.
"We need to find tools in the domestic environment that ideally do not have a negative impact on other countries," he said.
Gordhan said all available funds would be used to help South Africa's Reserve Bank rebuild its reserves.
Emerging market currencies, including South Africa's rand, have soared in value as investors faced with minimal interest rates in crisis-hit developed economies seek higher returns elsewhere.
In its medium term budget statement last month, the Treasury said Africa's biggest economy had few options to devalue the rand in the face of increased capital inflows.
The rand has gained 28 percent since the start of 2009 and was trading 0.57 percent lower at 6.8640 to the dollar by 0733 GMT.

Source: http://234next.com/csp/cms/sites/Next/News/World/5640377-147/s.africas_gordhan_worried_about_capital_inflows.csp
 

Zuma reshuffles cabinet, sacks seven ministers

Jacob Zuma

South African President Jacob Zuma sacked seven ministers on Sunday in a major cabinet reshuffle aimed at strengthening the government and seen as making some concessions to the left, Reuters reports.

Zuma told a news conference that the reshuffle -- the biggest change in the government since he became president in May 2009 -- was aimed at boosting government ministries, and improving basic services and the lives of the poor.

“Given the fact that we still face serious challenges of unemployment, poverty and inequality in the country, government has to work at a faster pace to change the lives of the poor,” Zuma said.

The government‘s leftist allies in labour federation COSATU and the South African Communist Party have piled pressure on Zuma to create more jobs and lift economic growth in Africa‘s biggest economy.

Relations between the ruling ANC and COSATU have soured over a public sector strike which was settled in October with a 7.5 percent wage increase -- double that of the rate of inflation.

The government said last week it aimed to create 5 million jobs over the next decade.

The change was one of the most radical overhauls of the South African cabinet in several years and some of the changes could be due to Zuma making a concession to his leftist labour and communist allies, said Nel Marais, analyst at Executive Research Associates.

He cited the replacement of Public Enterprises Minister Barbara Hogan -- responsible for state entities like power utility Eskom and rail and logistics group Transnet who has been criticised by labour federation

“There is clearly a cleansing process going on and one or two of the ministers have been criticised over ineffectiveness. Hogan was in a key portfolio and under pressure from the left, so it could be a concession to them,” Marais said.

Zuma‘s communist and labour allies have been pushing for economic policy to move to the left to benefit the poor.

Source:http://www.punchng.com/Articl.aspx?theartic=Art201011023282493