Page last updated at 17:03 GMT, Sunday, 10 May 2009 18:03 UK

Zuma calms markets with new cabinet

By Joseph Winter
BBC News, Pretoria

Jacob Zuma announces his new cabinet
President Zuma is under pressure to deliver to South Africa's poorest

South Africa's new President Jacob Zuma has taken the bold step of replacing the world's longest-serving finance minister in his first announcement since being sworn in on Saturday.

But, if anything, Mr Zuma has made the widely respected Trevor Manuel even more powerful, by naming him head of the new national planning commission in the president's office, as he announced his new cabinet.

The new commission will draw up the entire government strategy, Mr Zuma said.

And he has moved to avoid a repeat of the market jitters when Mr Manuel announced his resignation last year - only to be immediately reappointed - by naming his successor as Pravin Gordhan.

"He is an excellent choice," Chris Hart, chief economist at Investment Solutions, told the BBC.

Overall, South Africa's new president has struck a careful balancing act between the conflicting demands of his millions of poor black supporters, who want more state spending, and the powerful business community.

Although Mr Zuma has always denied planning to change economic tack, his support base lies on the left of the economic spectrum and he enjoys the full backing of the South African Communist Party (SACP) and the trade union grouping, Cosatu.

Financial pressure

This led some analysts to predict that President Zuma would be less business-friendly than his long-time rival, former President Thabo Mbeki, and that he might succumb to pressure from his supporters to massively increase state spending.

Mr Hart thinks the markets will not be fazed by the nomination of Mr Gordhan, who until now has headed the South African Revenue Service, where he has increased income and made the administration more efficient.

"He is quite capable of standing up to any 'loonyness' in terms of economic policy," said Mr Hart.

But Mr Zuma will be under pressure from millions of poor South Africans to have a bit of "loonyness" - if that means more government jobs and spending on things like better schools and provision of water, housing and electricity.

Supporters of Jacon Zuma in Pretoria
Mr Zuma's supporters want more spending on jobs and education

"He knows the poor of this country - we are hoping for a lot from him," South African resident Nkompela Xolile told the BBC shortly before Mr Zuma took the oath of office on Saturday.

They take heart from the fact that Mr Zuma grew up in poverty and started out herding goats in his village of Nkandla.

Following the SACP's support for his candidacy, Mr Zuma did name its leader Blade Nzimande as higher education minister.

"He will try and influence economic policy," said Mr Hart, who remains slightly concerned about the direction economic policy could take in the future.

Drink a cup of rooibos tea, with honey and lemon
Jacob Zuma on his first move in his new office

"The National Planning Commission sounds like something you'd find in the Soviet Union or North Korea.

"The fact that Manuel is in charge is encouraging but that you have it at all is a concern."

Furthermore, Mr Zuma named veteran union leader Ebrahim Patel to head the new economic development department.

The precise division of power between Mr Patel, Mr Manuel and Mr Gordhan remains unclear.

Mr Hart will no doubt be relieved though that the new president has resisted calls to bring veteran left-winger Winnie Mandikizela-Mandela into cabinet.

She has recently been extremely visible next to Mr Zuma and was loudly cheered by ANC activists at Saturday's presidential inauguration.

When asked about the direction of economic policy, Mr Zuma said that it would be reviewed by the new team and he did not want to "jump the gun".

After announcing the cabinet, Mr Zuma warned his new team: "We will not tolerate laziness or incompetence."

And he appointed a new "cabinet enforcer" in his office - Collins Chabane - to evaluate and monitor the performance of the rest of the cabinet.

The appointment of Mr Chabane and Mr Manuel means the new president has moved to concentrate more power in his office.

Various wives

But the soap opera of Mr Zuma's various wives refuses to go away.

On Saturday, he had his first wife Sizakele Khumalo at his side, while his two other spouses were also present at the inauguration ceremony.

There had been speculation that Mr Zuma may be unable to include his ex-wife, outgoing Foreign Affairs Minister Nkosazana Dlamini-Zuma, in his cabinet. Relations between the pair are described as "frosty".

Instead she has been moved sideways, to the still powerful position of home - not domestic - affairs.

It might be that on South African mothers' day, he did not want to spark a row with the mother of four of his at least 18 children.

Jacob Zuma and Sizakele Khumalo
Mr Zuma's first wife accompanied him on inauguration day

South Africa has the world's biggest HIV pandemic, with some 5.5 million people carrying the Aids virus.

So some will be alarmed that Mr Zuma has moved to change his health minister.

Barbara Hogan was appointed last year to widespread acclaim following years of antagonism between her predecessor and Aids activists.

But Mr Zuma dismissed suggestions that his appointment of Aaron Motsoaledi was "strange" and said he had a lot of experience at provincial level.

He also noted that he had not sacked Ms Hogan, merely switched her to public enterprises.

Cup of rooibos tea

In the long term, the most significant appointment apart from Mr Gordhan, could be that of Tokyo Sexwale.

Like Mr Zuma and Nelson Mandela, Mr Sexwale was imprisoned on Robben Island for his role in the fight against white minority rule.

After the end of apartheid in 1994, he became the influential premier of the Gauteng Province, which includes Johannesburg and the capital, Pretoria.

He then left politics to concentrate on his extensive business affairs.

Although his post of minister of human settlements is not glamorous, it is crucial in South Africa, where millions are waiting for affordable housing, which they expect the ANC to provide.

His return to politics means he is already being talked about as a future president.

Especially as Mr Zuma, 67, has said he will only serve one five-year term.

Asked by the BBC what would be the first thing he would do in office, Mr Zuma replied: "Drink a cup of rooibos tea, with honey and lemon."

And then, it's down to work for Mr Zuma and his team.

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