South Africa’s Minister in the Presidency, Jeff Radebe, announced on Friday that there would be a special meeting of Cabinet’s economics cluster on Tuesday to discuss the country’s credit rating and falling currency.
International ratings agencies last week downgraded South Africa’s credit rating to one notch above junk status, and on Wednesday President Jacob Zuma axed Finance Minister Nhlanhla Nene, sending the rand into freefall.
During a post-Cabinet briefing on Friday, Radebe said: “This meeting on Tuesday is being convened to deal with the matters of the economy. It is a continuation of discussions that is normally being held in Cabinet, especially now with this very bad economic climate we are under.
“So all of us are concerned as Cabinet, so this discussion Tuesday we believe will go a long way in informing us what needs to be done in order to ensure that we put our shoulders into the wheel of driving economic growth and job creation.”
Zuma replaced Nene with the little heralded David van Rooyen who was sworn in at the Union buildings in Pretoria on Thursday.
Radebe told reporters that Nene gave an extensive briefing to Cabinet on the economy hours before his dismissal.
He said that discussion touched on the upset to the country’s credit rating but was not concluded because it was intended to continue on Tuesday.
“Cabinet did discuss the issue of the economy including the report of the downgrade by Fitch and Standard & Poor’s. The former minister of finance gave an extensive presentation on these matters but it was not concluded because there is a special meeting that is going to be convened… by all clusters, in particular the economic cluster to look at all these matters in details.”
Radebe said that at that point, Cabinet had no idea that the trusted finance minister would be replaced. He said he was also not aware of any widely-rumoured plans on the part of Zuma to effect a further Cabinet reshuffle, adding that ministers were not “sangomas” who could divine the president’s plans.
The rand on Friday showed no sign of ending its freefall in the wake of Nene’s departure and the downgrade, tumbling further to R15.86 to the dollar and R17.39 to the euro at 2pm.
In the meanwhile, a narrative was firming that the reason for Nene’s sudden dismissal was his rejection of South African Airways’s plan to renegotiate its deal with Airbus to lease five A330 aircraft.
Nene publicly vetoed the plan to purchase the aircraft and then sell it to a third, local party who would lease it back to the embattled carrier in rand denominated prices.
However, it is reliably understood that this did not spell the end of negotiations between SAA and Airbus, which has set a deadline of December 21 for the talks.
– African News Agency (ANA)
