“It’s a reflection of the near utter incompetence of the President (Jacob Zuma) to remove the finance minister at this stage”, said Per Hammarlund, chief emerging markets strategist at SEB, adding that Nene had been quite fiscally conservative.
Advertisement
By 0601 GMT the rand had weakened 0.61 percent to 15.0665 per dollar compared to its close of 14.9750 in NY.
Zuma announced on Wednesday that David van Rooyen, a former mayor, would take over from Nene, who has been in the position since May a year ago.
One report linked Nene’s defenestration to his ministry’s opposition to the president’s plans for an approximately $100bn deal to purchase eight nuclear reactors from the Russian Federation and question marks surrounding deals at state-owned airline SAA.
“Accompanied by no reasons for such a drastic move, one can only conclude that tonight’s action is yet another example of how President Zuma puts himself first and the country second”.
Analysts remain unimpressed. “The brief comments and subsequent statement from the new finance minister were a disappointment and focused on domestic political issues rather than any even subtle hint to try and calm the markets”, said Peter Attard Montalto, emerging markets analyst at Nomura.
Van Rooyen is South Africa’s third finance minister after Pravin Gordhan and Nene in the last six years.
Other commentators have agreed with Jammine’s summation that Zuma’s decision had largely been driven by politics, and not economic considerations. “This is sure to make the plight of the unemployed in South Africa even more hard”. “There can be no more shocking news coming out of South Africa to signify that we are a country in crisis, with no knowledge of what tomorrow holds”.
“I have known him since 2009”, Ross said by phone.
Black Business Council (BBC) vice-president Sandile Zungu said it “would not have anticipated the removal of Mr Nene, especially not at this time”.
South Africa’s credit rating is on the verge of junk status at a time when the price of its exports of gold, coal and platinum are tumbling. It also took on the treasury, saying it is controlled by “neoliberal hardliners”.
Advertisement
Van Rooyen serves as a Whip of the Standing Committee on Finance and as Whip of the Economic Transformation Cluster.
