Justice Sisi Khampepe swears in South Africa’s new finance minister David van Rooyen (left) as South Africa’s president Jacob Zuma (centre) looks on during a ceremony at the Union building in Pretoria, December 10, 2015.
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South African President Jacob Zuma’s sacking of his respected finance minister in favour of a relative unknown has shocked investors and emboldened critics who say the 73-year-old is driving the economy to ruin.
The decision taken by South Africa’s president to replace his finance minister Nhlanhla Nene will not be without its costs, analysts said.
In a statement, Zuma said he received many proposals to reconsider his decision to install van Rooyen, a former mayor and member of parliament who served on financial committees.
Later, Zuma tried to bring about some calm by saying that Nene had been removed because he was in line for a top position at the new BRICS Bank.
Ratings agency Standard & Poor’s has warned that any deviation of South African fiscal policy under the new finance minister could lead to a credit downgrade.
“President Zuma is such a disaster that his remaining in office will continue to impact South Africa very negatively – the effects of which will last for a long time”.
It called for “adherence to the set expenditure ceiling while maintaining a stable trajectory of our debt portfolio, as set out in the February 2015 Budget”.
In a statement, the president admitted that he had made a mistake.
The US Federal Reserve is expected to raise interest rates on the same day in a move that could put economies in countries like South Africa under further pressure.
Nomura analyst Peter Montalto said that it was opposition within the ANCto Van Rooyen’s appointment that pushed Zuma into his surprise U-turn. “Zuma has lost his political aura and now the vultures will circle ever more tightly and the possibility of an early recall looms large”, Hartley wrote.
In a similar reaction, Economic Freedom Fighters (EFF) National Spokesperson, Mbuyiseni Ndlozi, said Zuma’s announcement has reduced the country to a “banana republic”.
“The EFF calls for the immediate resignation of Zuma before he plunges the country into a deeper crisis”, the party said in a statement.
“Media reports that Mr Nhlanhla Nene is being redeployed because the SAA Board chairperson was unhappy with the National Treasury directives to SAA with regards to the Airbus deal or any other matter is a malicious fabrication”, the presidency said.
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Following a late-night meeting with the alliance leadership on Friday, Zuma stressed that state-owned companies, including SAA, would not be allowed to dictate how they were to be assisted by the government.
