South African President Jacob Zuma said on Thursday that he backs Finance Minister Pravin Gordhan but cannot intervene in a police investigation over a suspected spy unit at the tax service.
He signal a prolonged tussle that could rock markets further.
Gordhan had said on Wednesday that he had done nothing wrong.
He said that he had no legal obligation to obey a police summons linked to an investigation into whether he used the South African Revenue Service to spy on politicians including Zuma.
The rand, which had tumbled 5 per cent since on Tuesday in response to the investigation, picked up on Thursday and gained further ground after Zuma’s statement.
Government bonds also firmed, even though analysts said the president had offered only qualified support.
News of Gordhan’s summons this week compounded investors’ worries about a power struggle between Zuma and Gordhan as Africa’s most industrialised economy teeters near recession and credit rating agencies consider downgrading it to “junk”.
The main opposition party also on Thursday called for a parliamentary debate into what it called a “witch-hunt” against Gordhan, who was in charge of the tax service when the unit under investigation was set up.
Investors and rating agencies back Gordhan’s plans to rein in government spending in an economy that has been forecast by the central bank to register no growth this year.
In his first public comments on the matter since it surfaced late on Tuesday, Zuma said he had noted the concerns by individuals and various organisations over the investigation.
“President Jacob Zuma wishes to express his full support and confidence in the Minister of Finance and emphasises the fact that the minister has not been found guilty of any wrong doing,” the presidency said in a statement.
“The Presidency wishes to also emphasise that the President does not have powers to stop any investigations into any individual/s,” it said.
It also said that Zuma could not bring a halt to the probe even if it was negatively affecting the economy.