South Africa’s rand falls after Finance Minister Nene sacked

The South African Property Owners Association (Sapoa) has expressed their disappointment at the decision by President Jacob Zuma to remove Finance Minister Nhlanhla Nene.

KHUTSONG, South Africa, Dec 11 Residents of South Africa’s Khutsong township remember David van Rooyen as a kindly mayor always willing to help out.

“She [Myeni] was already responsible for the movement out of public enterprises of Malusi Gigaba and when Lynne Brown took his place and she did not get along with Myeni… what happened is the management of SAA was moved to the National Treasury so Nhlanhla Nene got that responsibility and now because he stood up to her, he has also been moved off”.

Manuel was finance minister throughout Nelson Mandela’s presidency as well as Thabo Mbeki’s presidency, totalling 15 years in the job.

While the organisation was discomforted by Zuma’s decision, COSATU wished the new Minister, David Van Rooyen well in his new position.

Zuma gave no explanation for removing Nene, saying only that he had “done well since his appointment as minister of finance during a hard economic climate” and will be moved to another key role.

South Africa’s finance ministry has come under “the most intense political pressure in recent months”, reports the economic news website Fin24. That may seem low compared with European countries such as Britain, where public debt is about 80% of GDP.

Ideally, South Africa would grow its way out of this hole. The central bank is forecasting growth of 1.4 percent this year, which would be the slowest pace since the 2009 recession. Both Fitch and Standard & Poor’s cited this as a big worry.

Government bonds however held on to their gains, with the yield on the benchmark paper due in 2026 shedding 0.05 basis points to 8.830 percent., a level last seen in February 2014. Key state-owned companies, such as the electricity utility Eskom Holdings SOC Ltd., have been dogged by leadership problems and funding shortages. That is enough time to change course, but there is little will. “In the cabinet there are those who understand why a credit rating is important and those who have no clue about what it means”, said an executive at a large South African firm, shortly before the finance minister was axed.