Shock removal of Finance Minister sees drop in currency
Economists believe the appointment of the new Finance Minister creates further doubts about cohesiveness of South Africa's economic policy.
LAST night President Jacob Zuma made a surprise announcement that Finance Minister Nhlanhla Nene would be removed from the Finance portfolio in Cabinet and replaced by ANC MP David van Rooyen.
Nene is the shortest sitting finance minister in the history of the country and the move has had an immediate negative effect on the economy, with the rand plummeting against major international currencies.
By 21:20 on Wednesday, the rand was trading at R16.34 to the euro (down 2.74%) and R22.5 against the pound (down 2.5%).
The rand was down 1.39% against the greenback at R14.83/$.
Political analyst Daniel Silke said the removal of Nene sent the wrong signals about South Africa’s already ailing economy.
Silke said the replacement of Nene will be questioned by anxious domestic and foreign investors alike on issues of fiscal prudence discipline going forward and will create further doubts about cohesiveness of South Africa’s economic policy.
Nomura International Emerging Markets Economist Peter Attard Montalto added that Van Rooyen does not appear to have had strong policy making credentials within the ANC structures over the last 20 years in the way the previous three finance ministers did.
‘He has been a member of the economic development cluster of the ANC but as a ‘whip’, which normally implies a more political than policy role.’ said Montalto.
The competent minister #NhlanhlaNene fired for doing his job this is declaration of a crisis.
— Dr.Nandipha (@DrNandipha) December 10, 2015
Replaced by ANC MP David van Rooyen
Van Rooyen was a former Umkhonto we Sizwe operative in the 1980s and has held a number of leadership positions in the ANC from 1994 to 2007.
He served as the Whip of the Standing Committee on Finance and as Whip of the Economic Transformation Cluster.
He was also a former executive mayor of Merafong Municipality and a former North West provincial chairperson of the South African Local Government Association.
He has an advanced Business Management Diploma, a Diploma in Municipal Governance, a certificate in Municipal Governance, a certificate in Councillor Development, a certificate in Municipal Finance, a certificate in Economic and Public Finance and a Masters Degree in Public Development and Management.
In July 2014, the University of London conferred an MSc Finance to Van Rooyen and he has also recently acquired a certificate in Investment Analysis and Portfolio Management from UNISA.
Where are the voices of the strong men & women in the @MyANC_? #FinanceMinister #NhlanhlaNene
— 17 May (@Sabattta) December 10, 2015
https://twitter.com/Zekhethelo_M/status/674870447222206464
