(Bloomberg) -- The head of South Africa's Treasury, Lungisa Fuzile, said he's asked to leave the government in May, one year before his contract expires, but that his departure was unlikely to trigger an exodus of other top officials.
He has discussed his departure with Finance Minister Malusi Gigaba and may delay his exit if necessary to ensure a smooth transition Treasury, Fuzile, who is the director-general, said Wednesday in an interview in Cape Town. He is leaving for family reasons, he said.
“It is not that I am leaving a house on fire, it is not that I am being chased away,” Fuzile said. “I have discussed it with minister Gigaba and we have agreed on the principle that the exit must be informed by the need to ensure a smooth transition. It is highly improbable that there will be an exodus” of other officials, he said.
President Jacob Zuma recalled Fuzile and former Finance Minister Pravin Gordhan from an investor roadshow in the U.K. on March 27, sparking speculation both would be fired. Gordhan, who had opposed the president on government spending and governance of state-owned enterprises, was removed on March 31 and replaced by Gigaba, prompting S&P Global Ratings to downgrade the nation's debt to junk on concern about policy continuity. The turmoil has roiled markets, driving the rand to a year-low on Wednesday.
Moody's Investors Service, which placed South Africa on a rating review for downgrade, has cited the strength of institutions including the Treasury as credit-positive. Fitch Ratings Ltd., which assesses South Africa one level above junk with a negative outlook, is expected to announce a rating decision within “the next week or week-and-a-half,” Fuzile said.
Zuma survived calls from senior party leaders to resign when a meeting of the African National Congress' National Working Committee opted on Tuesday to back the president. That sent the rand tumbling and bond yields rising as investors fretted the new cabinet may inaugurate an era of rising government spending and debt.
Read more about Zuma's chances of surviving
Fuzile's “imminent departure comes as no surprise; he has been on President Jacob Zuma's ‘hit list' for a long time,” David Maynier, finance spokesman for the Democratic Alliance, the main opposition party in Parliament, said in a statement. “We can only hope that his departure does not open the floodgates and that other senior officials do not begin to leave National Treasury.”
Fuzile, 51, said he told Gordhan of his plans to leave a day before Gordhan was fired. He's been in the post for six years. The cabinet last year extended his original five-year term for 24 months.
While a successor from inside the Treasury would be preferable, any appointee with the appropriate experience and competence would be acceptable to subordinates in the department as well as investors, Fuzile said. Concerns about policy continuity were premature, he said.
“I have no doubt, after interacting with minister Gigaba, that he is pursuing the broad policy objectives that his predecessors pursued,” Fuzile said.
To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net.
To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Rene Vollgraaff, Ana Monteiro
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