The sacking of Finance Minister Pravin Gordhan and his deputy Mcebisi Jonas would negatively affect the markets and put South Africa at risk for downgrades by rating agencies, emerging markets economist at Japanese investment bank Nomura, Peter Attard Montalto, said on Friday morning.

“This is an attack on the institution of National Treasury [NT] and as such will trigger multiple downgrades,” said Montalto.

“As we’ve highlighted before whilst there are some fiscal risks we are more worried about NT’s role in procurement, preventing corruption and oversight of SOEs [state-owned enterprises] including nuclear and banking.”

The market’s reaction to Gordhan’s replacement, former home affairs minister Malusi Gigaba, and the appointment of Sifiso Buthelezi as his deputy, was also likely to lead to some shock waves, Montalto said.

“The market will struggle to digest Gigaba. Someone who has been effective at home affairs but is clearly being put in a role to do a particular job by Zuma and viewed as loyal to Zuma. Similarly with Buthelezi,” he said.

“As we laid out in the piece on Wednesday we view this as an open attack on Treasury to replace people who are conservative and anti-corruption with people loyal to Zuma to help the Zuma faction win in December”.