South Africa's Manuel to be named planning head

PRETORIA (Reuters) - South Africa's Trevor Manuel is to be appointed head of a new economic planning body with Pravin Gordhan to be his successor as finance minister, a source close to the administration said on Sunday.

President Jacob Zuma is expected to announce the cabinet appointments at 1:00 p.m. British time (1200 GMT).

Gordhan was head of the country's tax authority and his appointment would point to policy continuity in Africa's biggest economy, where investors want Manuel to keep a strong role in shaping policy.

Zuma faces pressure to appoint effective ministers who can deliver on his ruling ANC's promises to tackle widespread poverty, crime and AIDS, and create jobs.

He said in his inauguration speech on Saturday the country should acknowledge it faces tough economic times and will not be spared the impact of the global credit crunch.

Stacking his cabinet with loyalists could undermine the credibility of Zuma, who has told ANC officials they should not expect jobs just because they supported him.

Zuma won a wide mandate in the ruling African National Congress' (ANC) April 22 landslide election victory. His toughest task may be balancing the interests of unions and communists who helped him rise to the top against those of investors who fear he will steer the economy to the left.

Manuel has won respect from business for keeping tight controls on spending.

(Additional reporting by Gordon Bell; Writing by Michael Georgy; Editing by Matthew Tostevin)