President Jacob Zuma on Wednesday removed Finance Minister Nhlanhla Nene from his post, after the rand tumbled to a record low in the wake of the latest downgrade to the country’s credit rating.
“I have decided to remove Mr Nhlanhla Nene as Minister of Finance, ahead of his deployment to another strategic position,” the president said in a statement on Wednesday evening.
Zuma said Nene — South Africa’s first black finance minister — would be replaced by David van Rooyen, the whip of Parliament’s standing committee on finance, who also serves as whip of the economic transformation cluster.
“Mr Nene has done well since his appointment as minister of finance during a difficult economic climate. Mr Nene enjoys a lot of respect in the sector locally and abroad, having also served as a deputy minister of finance previously,” Zuma added.
Nene was appointed as Finance Minister in May last year and succeeded Pravin Gordhan.
South Africa’s investment grade credit rating is under serious threat after a downgrade last Friday and it could struggle to fund crucial infrastructure projects and help put the economy on a more robust growth path.
On Friday, Fitch ratings agency downgraded the rating of Africa’s most industrialised economy by one notch to BBB-, the lowest investment grade category. It cited the slowing economy and rising debt.
Standard & Poor’s kept its own rating at BBB- but lowered the outlook to negative from stable, saying it believed economic growth might be lower than the 1.5 percent forecast by government.
The downgrade is expected to see government struggle to raise funding for critical infrastructure projects, including electricity utility Eskom’s build programme.
It sent the rand to a record low against the dollar on Monday and saw Royal Merchant Bank (RMB) warn of a high risk the country was heading to a downgrade to junk status — the grade at which international bond portfolio managers refuse to own debt — in 2016. (African News Agency)
Meanwhile DA leader, Mmusi Maimane, has slammed President Jacob Zuma for sacking the Finance Minister, Nhlanhla Nene on Tuesday night.
Zuma replaced Nene with David van Rooyen.
In a hard-hitting statement the opposition leader said Nene's axing was reckless and dangerous and further damages the country's economy.
Maimane says Nene's sacking has already had a profoundly negative effect on the Rand which has plummeted to a new low against the US dollar.
He says the appointment of Van Rooyen provides no assurance that the economy is in safe hands.
