South Africa's Treasury is set to present its 2018 budget to parliament on Wednesday but market focus is on whether new President Cyril Ramaphosa will reshuffle the cabinet before then and replace Finance Minister Malusi Gigaba.

Ramaphosa was sworn in as head of state on Thursday after his scandal-plagued predecessor, Jacob Zuma, reluctantly resigned on orders of the ruling African National Congress (ANC) after nine years in office blighted by corruption, economic mismanagement and disputed appointments.

Ramaphosa was due to give more details about how he plans to tackle graft and revitalise economic growth on Friday when he gives his first state of the nation address.

"Ramaphosa should quickly announce a cabinet shuffle that jettisons all remnants of the Zuma years," BBH analysts wrote in a note adding: "the most important one that should be replaced is Finance Minister Gigaba." 

Some economists and political analysts questioned the credentials of Gigaba when he was named to head Treasury in March last year, replacing Pravin Gordhan who had built a strong reputation for fiscal prudence.

Gigaba's unexpected appointment made him the fourth minister to lead the Treasury in just under two years as South Africa grappled with low growth and high unemployment. Though he lacked an economics background, he was no policymaking novice, having been public enterprises minister under Zuma from 2009-2014.

He also served as home affairs minister before moving to the finance ministry.

"HUGE SCRUTINY"

In October, Gigaba announced dire budget forecasts that included weak growth expectations, revenue shortfall and rising government debt, shocking financial markets.

"Expect huge scrutiny of the new cabinet, likely to be appointed over the weekend, as President Ramaphosa treads the line between party unity and his promise to fight corruption," Rand Merchant Bank analyst John Cairns said.

"Speculation is rife over who will read the budget on Wednesday, although we will be more focused on the content than the persona."

Gigaba's spokesperson Mayihlome Tshwete said he could not comment on cabinet changes, but that the budget would among other issues focus on how to close an estimated 50.8-billion rand ($4.37-billion) revenue shortfall.

On the heels of October's budget woes, S&P Global Ratings downgraded South African local currency debt to "junk" in November, citing the deterioration in the country's economic outlook and public finances.

Fitch, which also rates South African debt as "junk", affirmed that rating in November. Moody's, which rates South African debt on its lowest investment grade rung, placed the country on review for a downgrade.

Moody's is expected to make a decision after the budget.

"Zuma's exit may be followed by a cabinet reshuffle, greater efforts for fiscal consolidation and further governance changes at state-owned enterprises," UBS analysts said.

"This should lower the probability of a rating downgrade by Moody's in March, although the risks remain considerable."

Analysts said other ministers who could be removed in a cabinet reshuffle include Mines Minister Mosebenzi Zwane amid policy uncertainty in the mining industry, an important economic engine that has been fighting in court with the minister over an increase in black ownership targets.

Ramaphosa has promised to end an impasse over the Mining Charter, introduced as part of a wider drive designed to rectify the lingering disparities of apartheid.