While new Finance Minister David van Rooyen was sworn in on Thursday, the President’s decision to replace Nhlanhla Nene was met with shock and disappointment.
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South Africa’s currency dipped to an unprecedented low against the USA dollar after the country’s finance minister was suddenly fired.
The economic impact of Zuma’s decision continues to be felt as the rand slipped around 5% on most major currencies by Thursday afternoon, reaching R15.33 to the dollar.
The swearing-in ceremony, which was conducted by Constitutional Court judge Sisi Khampepe, was attended by Van Rooyen’s family, national treasury director-general Lungisa Fuzile and President Jacob Zuma, who shocked the country last night when he “removed” Nene.
Opposition Democratic Alliance (DA) leader, Mmusi Maimane said van Rooyen’s appointment provided no assurance that the country’s economy was in safe hands.
The Banking Association of South Africa noted that Nene had tried to curb public spending as part of a sensible fiscal policy that was managing the country’s debt and criticized the appointment of an unproven successor.
News of Nene’s dismissal came just days after rating agencies reviewed South Africa’s debt which they set at just one notch above junk status.
“A lot of the selling is from foreign investors who’s confidence on the South African government has been shaken”. He served as the mayor of Merafong municipality in the central Gauteng province before being appointed to parliament, where he was a member of the finance committee. More concerning is that Zuma did not give any reasons for Nene’s removal.
“Zuma’s bad decision has influenced our economy negatively”.
Nene was former finance minister Pravin Gordhan’s deputy.
The party said in a statement that David van Rooyen was inexperienced with questionable political credentials. The business community believed Mr Nene was doing a credible job as minister of finance in hard circumstances.
“The surprise announcement, coupled with the lack of clarity on why Nene was replaced or the preferred policies of his relatively inexperienced successor, inevitably raises questions about the motivation for the change in personnel and the implications for economic policy”, the note said. Fifteen is considered a significant benchmark, and South Africa has sought to keep the rand below it.
Tell us how you feel about the Nhlanhla Nene’s removal.
Some media commentators said the move could make it easier for Mr. Zuma and his cronies to “loot” the government in the final four years of his presidential term.
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South African consumers, grappling with unemployment of more than 25 percent and rising interest rates, are finding it tougher to pay back loans.
