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Tuesday, September 23, 2008

South Africa in political crisis

Eleven South African government ministers have resigned following President Thabo Mbeki's decision to step down under pressure, the presidency said Tuesday.

It is the biggest political crisis since apartheid ended in 1994.

The resignations come two days before parliament is widely expected to choose ruling Africa National Congress deputy head Kgalema Motlanthe as president until next year's general election. Those who have submitted their resignations include Finance Minister Trevor Manuel, the statement that listed the ministers said. Manuel has been widely respected by investors. "The resignations will be effective from the day that the president's resignation takes effect," the statement said. "All the ministers have expressed their availability to assist the incoming administration in the hand-over process and any other assistance that might be sought from them."

South African markets fell after news of the resignations. The rand extended its losses to over 2.5 percent, bonds fell sharply and the blue-chip JSE Securities Exchange Top-40 index plunged over four percent. The resignations are likely to raise investor fears of political instability in Africa's biggest economy. ANC leader Jacob Zuma has made clear his backing for Motlanthe and pledged on Monday that the party would ensure a smooth transition and economic policy continuity.

Manuel's spokeswoman Thoraya Pandy said he was out of the country and she could not confirm his resignation. It was not immediately clear whether Motlanthe, would reappoint Manuel and other ministers.

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