South Africa’s Zuma denies affair with airline boss

In elevating David van Rooyen, an ANC whip on the standing committee on finance to replace Nene, however, Zuma skipped Nene’s deputy, the pragmatic and respected Mcebisi Jonas as well as the next logical appointment, the chair of the standing committee on Finance Yunus Carrim – the former minister of communications (himself fired for doing too good a job in a dysfunctional ministry).

The rand breached 16 to the United States dollar for the first time, government bond yields rose and bank stocks dived further in reaction to Nhlanhla Nene being dismissed late Wednesday.

In the statement, Zuma says that he has listened to the criticism – The Economist said that the decision to fire Nene “could not have been more foolish” – and reconsidered his decision.

In another baffling Cabinet reshuffle, President Jacob Zuma announced that he has appointed Pravin Gordhan as the new finance minister.

South African president Jacob Zuma on Saturday denied rumours he had an affair with the chairwoman of state-owned airline amid media speculation the relationship had led to the sacking of the finance minister.

He said Nene had been nominated as South Africa’s candidate to head the African Regional Centre of the newly formed BRICS bank.

“No member of the SAA Board is above the Minister of Finance or can operate outside of the mandate and direction provided by the Minister of Finance and the National Treasury”, the Presidency said.

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. “As a democratic government, we emphasise the importance of listening to the people and to respond to their views”, Zuma said yesterday.

The country’s currency, the Rand, plunged to a record low following the unexpected dismissal of Nhlanhla Nene, who had dared to challenge “reckless” spending plans by Zuma and his acolytes. “Typically, in such a dramatic move, the president not only takes the cabinet into his confidence but also consults the affected stakeholders – in this case, the banking sector, the financial sector, the investment community”.

Gordhan would also ensure adherence to the set expenditure ceiling while maintaining a stable trajectory of the country’s debt portfolio, as set out in the February 2015 Budget, Zuma said.

Hogan, the highest-profile member of the ANC to come out against the sacking of Nene, said Zuma had crossed a line and needed to be held to account.

Government also remains committed to provide support to State Owned Companies in a fiscally sustainable manner, including South African Airways.

Analysts had speculated that the bank may call an earlier meeting to increase interest rates to protect the rand.

Credit ratings agency Fitch, which downgraded South Africa last Friday to just one notch above “junk” status, said Nene’s firing “raised more negative than positive questions”.

It is clear that President Zuma has manufactured a post-hoc rationalisation of his disastrous decision two days ago, in response to the devastating consequences that decision has already had for the economy.