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Rand Strengthens after Ramaphosa announces New Cabinet

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By Ragheema Mclean

The South African rand firmed on Monday morning, marking its third consecutive day of gains as investors responded positively to President Cyril Ramaphosa’s announcement of the new cabinet.

After much deliberation, Ramaphosa unveiled the new ministers on Sunday night (30 June), which includes members from several parties forming the government of national unity (GNU).

On Monday morning, the rand traded at the following levels against major currencies:

– ZAR/USD: R17.97 (-1.10%)
– ZAR/GBP: R22.75 (-0.96%)
– ZAR/EUR: R19.32 (-0.77%)

Speaking on VOC’s News Beat show, chartered accountant, activist, and academic Khaya Sithole said the market’s reaction to the new cabinet announcement was expected.

“It seems to be a continuation of the sentiments that we’ve witnessed in the past couple of weeks, whenever conversations gravitated towards the ANC and the DA,” he added.

“If there was a different outcome in the cabinet, the markets would have reflected it.”

Sithole noted the complexity of the process, given the diverse nature of the parties involved.

“As we can see through the spectrum of those that were appointed, there are different skill sets, competencies, and temperaments, which will be important for newcomers in ministerial positions,” Sithole added.

“They are going to have to find a way to reconcile their own political persuasions, their parties’ persuasions with the agenda of the government of the day, as well as balance their own party’s stance with that of the ANC.”

Despite previously promising to reduce the number of executive positions, Ramaphosa expanded his cabinet, adding two ministries, appointing 33 ministers and 43 deputy ministers.

Significant appointments in the new cabinet include DA leader John Steenhuisen as the Minister of Agriculture, Gayton Mackenzie from the Patriotic Alliance (PA) as the Minister of Sports, Arts, and Culture, and Freedom Front Plus (FFP) leader Pieter Groenewald as the Minister of Correctional Services.

Groenewald will be working with Lindiwe Ntshalintshali from the ANC, who will serve as his deputy.

He takes over from the ANC’s Ronald Lamola, who is now the Minister of International Relations and Cooperation.

The Police and Prisons Civil Rights Union (POPCRU) Media and Communications Director Richard Mamabola shared his thoughts on Groenewald’s appointment.

“We note the appointment and its impact on the criminal justice environment. We also think it is quite important that we start working with the minister,” Mamabola stated.

“We cannot do anything about his appointment since it’s the prerogative of the president.”

Mamabola said POPCRU will now push the new ministry to focus on addressing challenges within the correctional services sector, such as overcrowding and understaffing, and the need to make prisons more self-sustainable.

“We’ve always had issues with overcrowding and understaffing, and then there’s also the issue of making our prisons more self-sustainable,” Mamabola added.

“Then there is the issue of private prisons. For a long time, we’ve been advocating for private prisons to be taken over by the government and that private businesses are no longer involved.”

As the new cabinet begins its term, the focus will be on how effectively it can address these pressing issues and balance the interests of the various parties involved in the GNU.

VOC News

Photo: Pexels

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