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South Africa split sparks stability speculati -

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ELEANOR HALL: In South Africa the government is in crisis, 11 ministers have resigned splitting the
ruling African National Congress in the wake of the forced resignation of President Thabo Mbeki.
(*See Editor's note.)

Among the those handing in their resignations was the powerful finance minister Trevor Manuel.

While he has promised to serve in the new government, the upheaval raises questions about the
party's unity under Jacob Zuma.

Lisa Millar has our report.

LISA MILLAR: The South African President Thabo Mbeki's resignation has sparked political infighting
and unrest.

And now more than a third of his cabinet has joined him, deepening the biggest political crisis
since the end of apartheid.

Among those to resign is the Deputy Finance Minister, who's in charge of finances for the 2010
Rugby World Cup.

But it's his boss who is one of the biggest losses, the highly respected Finance Minister Trevor
Manuel.

He's seen as key to the country's economic stability, so his resignation shook not only the
financial markets, but ordinary South Africans as well.

WOMAN: I'm sure you all know that he's the most loved minister and now he's resigned and I'm
thinking there must be a plan behind the whole thing, there must be something that must have pushed
him out.

LISA MILLAR: At a hastily called press conference in Washington, Trevor Manuel said his resignation
was simply a courtesy to the new leader and he'd be happy to stay in the role within the new
government.

TREVOR MANUEL: It's important that we have in government people who are willing to carry the can to
implement policy decisions taken and to ensure that there's some policy continuity.

So having declared my willingness to resign when the President leaves, the minute I was approached
to avail myself to continue serving in the same capacity, I of course very readily agreed. There is
no contradiction.

LISA MILLAR: At an equally hurried press conference in Johannesburg, the African National Congress'
secretary general Gwede Mantashe tried to play down fears of more political turbulence.

GWEDE MANTASHE: We think that things are under control there's no crisis, this transition is
managed perfectly and that's why when there is uncertainly we must move with the necessary speed
and correct it.

That is not a sign of crisis, it is a sign of an organized organisation that is ready to deal with
the situation at hand.

LISA MILLAR: He says only six of the 11 have said they are definitely leaving the cabinet.

GWEDE MANTASHE: The call by the President to have all the ministers remaining, that call still
stands, so I expect all the ministers to remain in their deployment, but you can't stand in the way
of those who as a matter of conviction believe that they cannot continue serving in the new
administration.

LISA MILLAR: The leader of the party and the man expected to become president at next year's
election, Jacob Zuma says the resignations are nothing extraordinary.

But the power struggle between Thabo Mbeki and his successor is threatening to split the party.

Economist Mike Schussler.

MIKE SCHUSSLER: It is certainly aiming to be a crisis because one thing that we've got at the
moment is we've got no clear leadership and we've got no appointee for who's going to replace
Trevor Manuel.

We must remember the Deputy Minister of Finance has also resigned, and the Minister of Public
Enterprises has resigned so at this moment in time, it's not a very good situation and we need the
ANC to lead and to appoint ministers very, very quickly.

We've seen the rand fall against the US dollar, 30 cents against the euro and 40 cents against the
pound sterling, and the interest rates have really rocketed up so we at this moment in time are
very, very jittery financial markets, on top of the highest inflation we've had since '92, this is
certainly not a good sign.

LISA MILLAR: Jacob Zuma promises it's a passing phase but his hopes of a smooth transition of power
must be evaporating.

ELEANOR HALL: Lisa Millar reporting.

*Editor's note: Transcript amended to give Thabo Mbeki's correct position.