Jacob Zuma
SOUTH Africa’s President Jacob Zuma appointed Pravin Gordhan as Finance Minister on Sunday, in a dramatic U-turn that gave South Africa its third finance chief in a week after a selling frenzy in the markets.
The shock announcement restoring Gordhan to the post sent the rand surging nearly five percent on Sunday evening, but failed to quell a tide of criticism of the president.
“This is reckless by President Zuma, he is playing Russian roulette with the South African economy,” opposition Democratic Alliance leader Mmusi Maimane said.
Zuma sacked Nhlanhla Nene from the ministry late on Wednesday, sparking a wave of criticism and financial turmoil, and replaced him with the relatively unknown lawmaker David van Rooyen.
The removal of Nene, who was keen to rein in government spending in Africa’s most industrialised economy, sent the rand currency to record lows, sparked a sell-off in bank stocks and sent yields in both local and dollar-denominated debt soaring.
The JSE All-share index .JALSH lost US$10,68 billion between Thursday and Friday.
“Critics would say having a finance minister serving only two days doesn’t bode well for the reputation of South Africa,” said Mohammed Nalla, head of research at Nedbank Capital.
“International investors are probably thinking: why didn’t the president make a much more considered decision in the first place?”
Many economists had questioned van Rooyen’s ability to steady an economy hammered by falling prices for commodity exports that range from coal to gold.
“On the 9th of December 2015, I announced the appointment of a new Minister of Finance, Mr David van Rooyen,” Sunday’s statement from the presidency said.
“I have received many representations to reconsider my decision. As a democratic government, we emphasise the importance of listening to the people and to respond to their views.”
“DISCIPLINE AND PRUDENCE”
The statement said Gordhan’s role would include “promoting and strengthening the fiscal discipline and prudence” and “working with the financial sector so that its stability is preserved”.
It called for “adherence to the set expenditure ceiling while maintaining a stable trajectory of our debt portfolio, as set out in the February 2015 Budget”.
The statement also called for “more inclusive growth and accelerated job creation while continuing the work of ensuring that our debt is stabilised over the medium term”.
“I’m not in the job yet. Not until I’m sworn in tomorrow morning at 10 a.m.” local time (0800 GMT), Gordhan told Reuters. He said a news conference was scheduled for 1000 GMT on Monday after his swearing-in.
Gordhan held the post of finance minister from 2009 to 2014, when he was replaced with Nene and moved to the post of minister for cooperative governance and traditional affairs.
The Sunday presidency statement said van Rooyen would become the new minister of cooperative governance and traditional affairs.
Zuma on Saturday denied rumours he had an affair with the chairwoman of state-owned airline amid media speculation the relationship lay behind Nene’s sacking.
The minister had rebuked Dudu Myeni, chairwoman of state-owned South African Airways and a close ally of Zuma, for mismanaging a 1 billion rand (US$62.98 million) deal with Airbus.
Zuma’s office also criticised as a “malicious fabrication” reports that Nene was removed because Myeni was not happy with instructions from the respected former finance minister.
Former South African health minister and leading anti-apartheid activist Barbara Hogan called on Friday for Zuma to quit.
The highest-profile member of the African National Congress (ANC) to come out against the sacking of Nene, Hogan said Zuma had crossed a line and needed to be held to account.
Analyst Razia Khan of Standard Chartered Bank said the week’s turmoil was “perhaps the first instance since 2007 that Zuma has come under severe pressure within the party”. Reuters
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