Business leaders are concerned about the institutional memory vacuum created at National Treasury by President Jacob Zuma’s Cabinet reshuffle.

Cas Coovadia‚ managing director of the Banking Association of South Africa‚ said in a statement on Friday morning that Zuma’s move has put the nation into a state of turmoil.

“The specific change in both Finance Minister and Deputy Finance Minister creates a dire loss of institutional knowledge and raises legitimate and alarming concerns regarding issues of fiscal discipline‚ protection of institutions and indeed the scope [of] state capture.

“The [BASA] has previously voiced its deep concerns regarding the actions of the president. These have fallen on deaf ears.”

Coovadia said that the position of finance minister is critical‚ while a credible National Treasury is important. The reshuffle‚ which saw Pravin Gordhan and his deputy Mcebisi Jonas axed from the Finance Ministry‚ has called into question the credibility of both‚ he said.

“The action of removing a Minister and a Deputy Minister who have gained global and national credibility and were performing optimally under difficult circumstances raises questions about the rationale for their removal. This further makes it difficult for their successors to conduct their responsibilities as well.

“In short‚ the President’s actions have created increased uncertainty and risk. This is exacerbated by the fact that some Ministers who have performed very badly and publicity criticized have been retained.”

Coovadia said any sovereign downgrade would affect banking and business in general and undermine the abilities of these sectors to fund social programmes for the poor.

The South African Chamber of Commerce and Industry (Sacci) said it was concerned.

“Although it is a presidential prerogative for the president to deploy his ministers accordingly‚ we as business strongly believe that some measure of prudence is exercised to avoid the subsequent knock-on effect such decisions are likely to have on the economy of our country‚” Sacci said in a statement.

“On the political front it is our call as a business formation that there be cooperative partnership in managing sensitivities that may adversely impact our risk profile in international markets.

“That being the case‚ we want to urge government together with business‚ representatives of labour and civil society to get back to the investment road show in an effort to calm the markets and to build investor confidence.

“South Africa needs a stable and conducive climate for economic growth for us to be a preferred investment destination.

“These fundamentals must be supported by carefully thought through political decisions to the best interest of our beloved country‚ South Africa.”