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Pravin Gordhan, Minister of Finance of South Africa attends the World Economic Forum (WEF) annual meeting in Davos, Switzerland January 19, 2017. REUTERS/Ruben Sprich

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JOHANNESBURG (Reuters) - South African Finance Minister Pravin Gordhan said on Monday he sees a "difficult political year" for the ruling African National Congress (ANC) but that he saw "green shoots" of economic growth.

The ANC has a major policy conference at the end of June and late in the year will pick a new party leader to replace President Jacob Zuma as its candidate when his second term ends in 2019.

In an interview with the eNCA TV news channel before the unveiling of his annual budget on Wednesday, Gordhan said: "We seem to be improving slightly on the growth side, seeing some green shoots which we will describe for you on Wednesday."

"At the same time we have our challenges," he said, including: "A difficult political year for the ruling party which will create its own dynamics."

Asked about fraud charges that were brought against him last year and then dropped, Gordhan said: "That kind of abuse is totally unacceptable in our kind of young democracy."

The scandal unsettled markets and led to speculation that Zuma and his allies wanted to remove Gordhan, who commands huge respect among investors.

(Reporting by Ed Stoddard; Editing by Louise Ireland)

Reuters