The South African rand dropped by about 5.7 percent against the US dollar as a result of the announcement, holding at a record low of about 15.5 to the greenback.
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David van Rooyen, South Africa’s incoming finance minister, left, shakes hands with Jacob Zuma, South Africa’s president, during his swearing in ceremony at the Union Buildings in Pretoria, South Africa, on Thursday, Dec. 10, 2015.
In a statement, Zuma says he received many representations to reconsider his decision to remove Nene and appoint Van Rooyen.
Nearly exactly 48 hours after he stunned the nation, the financial markets and his own party by firing Nhlanhla Nene from the finance ministry, President Jacob Zuma has woken up to the severe damage he has done to the rand and investor confidence and tried to explain himself.
Cosatu said while it could appreciate and respect that the constitution gives Zuma the powers to make changes to the cabinet, it felt the decision was “ill-timed”.
I wish both Ministers all the best in their new deployments.
President Zuma offered no clear reason for the decision when it was announced on Wednesday evening.
Minister van Rooyen is supported by Deputy Minister Mcebisi Jonas who carries many years of experience in the economic cluster.
On the 9 of December 2015, I announced the appointment of a new Minister of Finance, Mr David van Rooyen.
South Africa’s former Finance Minister Nhlanhla Nene.
As a democratic government, we emphasise the importance of listening to the people and to respond to their views.
His fate and the market reaction unleashed a bout of deep pessimism in South Africa over ANC rule which has dominated politics since Nelson Mandela won the first post-apartheid elections in 1994.
Van Rooyen will now, after a mere handful of days on the job, take up the position vacated by Gordhan as minister of co-operative governance and traditional affairs (CoGTA).
Gordhan, who has held the position of finance minister before, is, however, a widely respected and capable figure. Nene clashed with the chairwoman of South African Airways, Dudu Myeni, who also heads Zuma’s charitable foundation, after he refused the loss- making national carrier permission to restructure a plane- leasing deal. Under the hashtag #ZumaMustFall, individuals on Twitter said they would march in key cities on Wednesday, a public holiday in South Africa and the same day when the Federal Reserve, the US central bank, is expected to raise interest rates – a move set to put emerging markets like South Africa under strain.
It was necessary to urgently replace Nene because he will be nominated as the head of African regional center of the Brics New Development Bank, which will be based in Johannesburg, Zuma said in the Friday statement.
Zuma also endeavoured to assure the country that Nene’s redeployment did not signify a change from the country’s economic policy or its commitment to retaining government’s spending ceiling and the stabilisation of its debt levels.
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Nene’s exit, which went unexplained by the presidency for two days, shocked the public and investors and, it is speculated, top ANC structures as well.
