Former South African health minister and leading anti-apartheid activist Barbara Hogan called on Friday for President Jacob Zuma to quit after his decision to fire Finance Minister Nhlanhla Nene sent markets and the rand into a tailspin.
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As of 08:07 the greenback was 0.53% stronger versus the rand at 15.052, which was near its lowest level since 1971. Member of Parliament David Van Rooyen would take up Nene’s position appointed, Zuma said in a statement.
ASISA indicated that it will be requesting an urgent meeting with the Presidency and the new Finance Minister, David van Rooyen.
Meanwhile, the Association for Savings and Investment South Africa (ASISA) has warned that the shock removal of Nene as finance minister is worrying. President Zuma did not issue a reason for Nene’s deployment, ironically, on International Anti-Corruption Day.
User?@_RuanNolte, said, “It’s time for South Africa to wake up!”
“Tonight’s announcement by President Zuma that he has fired Nene is a reckless and risky move that further damages the economy, said opposition Democratic Alliance leader Mmusi Maimane on his official twitter feed”.
Arthur Kamp, investment economist at Sanlam Investment Management, said the fact that Mr van Rooyen was unknown in the market would create uncertainty.
Zuma has been heavily criticized for frivolous spending on items such as a pool and soccer pitch at his rural retreat while the country, which has unemployment of around 25%, struggles with slow growth and its worst drought in decades.
Nic Borain, political analyst at BNP Paribas said the axing of Mr Nene will be interpreted in financial markets as the Presidents response to Mr Nene attempting to hold the line on fiscal discipline, in particular refusing to give in to demands made by South African Airways (SAA) chairwoman Dudu Myeni, or on Mr Zuma’s “preposterous pet nuclear project”.
Without a significant change in policy, some analysts predict, the rand may slip to 16 to the dollar, and ratings agencies could downgrade the country’s credit to junk status, which would make its debt servicing costs much steeper.
Standing near Johannesburg’s Ghandi Square, Sifiso Sithole, 38-years-old and self-employed, was discussing President Jacob Zuma’s surprise decision to replace the finance minister.
Montalto said the move reinforces his view that investors are rapidly becoming significantly and structurally more bearish on South Africa.
Many economists have questioned van Rooyen’s ability to steady an economy being hammered by the collapse in prices of South Africa’s commodity exports that range from coal to gold, and raised concerns that public spending could spiral out of control.
“We believe his experience and tenure as the ANC National Assembly Whip for both Finance Portfolio Committee and ANC Caucus’ Economic Transformation Cluster will enable him to provide the necessary leadership in the department”.
South Africa’s cabinet has approved a policy white paper on a compulsory health-insurance plan.
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Mr Zuma has been accused of protecting his own interests – and reinforcing the dominance of the ruling African National Congress (ANC) – by undermining South Africa’s institutions, including the finance ministry.
