A new unknown factor in South African economics is exactly where South African Finance Minister Trevor Manuel's allegiance will lie if a new breakaway ANC party is formed, says chief economist from Econometrix, Dr Azar Jammine.

This comes as news broke on Wednesday morning of strong moves towards the formation of such a party, made up largely of disgruntled ANC members after the ousting of Thabo Mbeki two weeks ago.

Jammine emphasised that the fact Manuel had retaken his oath to serve in a new Cabinet under caretaker president Kgalema Motlanthe had created continuity and this would help anchor economic stability.

"On 23 September we had a taste of what would happen if Manuel went off the scene," he added, referring to the day in which a statement was issued by the Presidency noting that Manuel had resigned. Manuel later that afternoon clarified that he would still be serving and that the resignation letter was delivered so the new administration could start anew without any encumbrances.

Rand lost 20 cents against dollar

The rand lost 20 cents against the dollar before the clarification of the "resignation" was announced.

"But if we get a '1912 ANC party', then where is Manuel's allegiance – it is a new unknown factor," said Jammine.

"This is probably the parting of the ways," former ANC chairperson and defence minister Mosiuoa Lekota told a press conference in Pretoria on Wednesday.

Lekota announced that he, and a group of like-minded individuals from around the country, will hold a 'convention or a congress' within the next two weeks to decide a way forward.

Without actually saying that he and his fellows were actually going to break away from the ANC, he went as close as possible to making a unilateral declaration of independence.

Manuel was among 11 Cabinet ministers and three deputy ministers who had resigned on 23 September. Deputy Finance Minister Jabu Moleketi had also resigned, and proceeded to resign his parliamentary seat as well, thus not continuing to serve, despite Manuel feeling he may.

Manuel is the world's longest-serving finance minister, having been appointed in June 1999 by Mbeki. He has been a member of the ANC's National Executive Committee since 1991. He was a former minister of trade and industry between 1994-1996.

Rumoured that Manuel may resign

It had long been rumoured that Manuel may resign in favour of a post at an international financial body.

Their letters of resignation had been received by President Thabo Mbeki "which, regretfully, he has had to accept", the presidency said in their statement at the time.

They included Deputy President Phumzile Mlambo-Ngcuka, who earlier in the day announced her resignation from the position, to which she was appointed after ANC president Jacob Zuma was released from his responsibilities as deputy president in 2005. One of the reasons she gave was to allow a new president the opportunity to choose their own deputy.

The other resignations were of the Ministers of: Defence, Mosiuoa Lekota; Minister in the Presidency Essop Pahad; Intelligence, Ronnie Kasrils; Correctional Services Ngconde Balfour; Public Enterprises, Alec Erwin; Science and Technology, Mosibudi Mangena; Public Works, Thoko Didiza; Provincial and Local Government, Sydney Mufamadi; and Public Service and Administration Geraldine Fraser-Moleketi.

The deputy ministers who resigned are: Foreign Affairs, Aziz Pahad; Finance, Jabu Moleketi and Correctional Services, Loretta Jacobus.

I-Net Bridge