Africa’s second biggest economy was plunged into turmoil by President Jacob Zuma’s decision to remove Finance Minister Nhlanhla Nene last week.
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Pravin Gordhan, who was rushed into the position on Sunday night, is an old hand whose appointment went some way to calming anxious investors after days of confusion. A negative market reaction to the decision forced Mr Zuma to replace Mr van Rooyen with Mr Gordhan, who ha previously held the post from 2009 until 2014.
Promoting and strengthening the fiscal discipline and prudence that has characterised our management of public finances since the dawn of freedom.
The slump in commodities has hit South Africa hard.
That promise may have come too late, given the events of the past few days.
“The ANC has chosen to defend its beleaguered President, rather than standing up for South Africa’s interests”, the official opposition party said in a statement after the ANC’s briefing on the outcomes of its extended National Working Committee (NWC) meeting.
Redeployed The crisis began last Wednesday when Mr Nene was “redeployed” – allegedly for reigning in spending at state-run South African Airways and refusing to allocate billions of rand to a nuclear power programme he felt was unaffordable – and replaced as finance minister by little-known ANC MP David van Rooyen. The countryside remains an ANC stronghold. The sudden reshuffle led to a panic on the stock market, and the value of the rand fell sharply against the dollar.
“The dire fiscal position, coupled with high inflation and a fragile balance of payments position, all point to a further depreciation of the rand against the dollar in 2016/17”, David Rees, senior market economist at Capital Economics, wrote in a note.
According to Ranjeni Munusamy, of the Daily Maverick news website, the leaders of the ruling party’s alliance partners, the South African Communist party and the Congress of South African Trade Unions, had warned they could no longer protect the president from an internal rebellion.
“The ANC does not listen to South Africans and it is an entirely out of touch party that has abandoned our common good”.
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The decision followed Zuma’s shock announcement on 9 December that Nhlanhla Nene had been removed from the finance portfolio in Cabinet.
