Zuma warning of economic 'pinch'

South Africa is facing hard times economically, its newly inaugurated President, Jacob Zuma, warned in his acceptance speech.

"Jobs are being lost in every economy across the world," he said. "We will not be spared the negative impact, and are beginning to feel the pinch."

But the ANC leader said the foundations of the economy were strong.

Mr Zuma's first task as president is to form his cabinet and he is due to announce its composition on Sunday.

Investors are watching to see if Finance Minister Trevor Manuel, who has been praised for his fiscal management, will be retained and also to what extent Mr Zuma's communist allies will be represented
Mr Manuel has expressed confidence in the new leader's abilities.

"Frequently people look for experience but what matters is attitude and aptitude," he said.

"The mood is very buoyed. Feeling very strong. There's a big wave to ride."

Mr Zuma was elected president by parliament after the African National Congress won the general election last month, albeit with a slightly reduced majority.

'Firm foundation'

He was sworn in on Saturday before 5,000 invited guests and crowds of supporters who had gathered at the Union Buildings in Pretoria.

We must acknowledge that we find ourselves in difficult economic times," he said.

Despite his bitter power struggle with his predecessor Thabo Mbeki, the new president paid tribute to his economic management.

Mr Mbeki had, he said, created a "firm foundation" for economic growth and development.

Turning to the 2010 World Cup, he promised "a world class event that will forever change the perceptions of the international community", drawing loud applause.

All South Africa's leaders since 1994 attended the lavish ceremony in Pretoria.

Jacob Zuma thanked Nelson Mandela for healing the wounds of the past in South Africa and establishing the "Rainbow Nation".

The Mandela-Mbeki years are now part of history, the BBC's Peter Biles reports, and it is President Zuma who has to address huge economic and social challenges.

The first test of his presidency will come in the 24 hours when he reveals the members of his cabinet, our correspondent says.

Epic struggle

Jacob Zuma's journey to the Union Buildings has been an epic struggle, our correspondent adds.

He was sacked as vice-president by Thabo Mbeki four years ago after being implicated in a corruption scandal - allegations Mr Zuma always denied.

The case was eventually thrown out amid evidence of government meddling in the investigation.

In February 2006, he was acquitted of rape in a separate case, though he was widely criticised for his comments about sex and HIV/Aids.

At the time, few observers believed Mr Zuma could remain a serious contender for president, our correspondent says.

But he fought to clear his name, retained enormous popularity, especially among his fellow Zulus, and led the ANC to a convincing election victory two weeks ago on a pro-poor populist ticket.

He has listed his five priorities as land redistribution, education, health, lowering crime levels and finding decent work for all South Africans.