Why Zuma fired Nene is anyone’s guess FINANCE DEPARTMENT The good, the bad and the fallen rand

2015-12-16 06:00
PHOTO: Elmond Jiyane Minister Nhlanhla Nene flanked by Tom Moyane, SARS Commissioner, Mncebisi Jonas, Deputy Minister of Finance and DG Lungile Fuzile as they arrive ahead of Nene delivering his 2015 Budget Speech in the National Assembly in February

PHOTO: Elmond Jiyane Minister Nhlanhla Nene flanked by Tom Moyane, SARS Commissioner, Mncebisi Jonas, Deputy Minister of Finance and DG Lungile Fuzile as they arrive ahead of Nene delivering his 2015 Budget Speech in the National Assembly in February

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WHY did President Jacob Zuma fire Nhlanhla Nene as finance minister?

  • He did not say, leaving the matter wide open to speculation and opposition politicians, analysts and members of the public are hypothesising myriad reasons.

Most of the speculation revolves around Nene’s decision last week to turn down an SAA board proposal to restructure a re-fleeting agreement with Airbus. Nene instructed SAA to implement the transaction structure in line with the approval already granted. He reportedly warned if the board proceeded without his permission, it would constitute financial misconduct.

Western Cape Premier and former DA leader Helen Zille tweeted this was reason behind his axing.

Radio 702’s The Money Show host Bruce Whitfield said in a piece on Eyewitness News website there could be “no other inference to draw just a week after the now former finance minister instructed Dudu Myeni, the chair of SAA and the Jacob Zuma Foundation, to reinstate a carefully negotiated contract with French airliner maker Airbus”.

EFF spokesperson Mbuyiseni Ndlozi said: “Nene refused to give South African Airways guarantees and bailout when Zuma’s girlfriend and chairperson of the board requested it.”

United Democratic Movement leader Bantu Holomisa also believed Zuma’s relationship with Myeni had a role to play in the axing. “We know Nene was dressed down by this lady in an ANC study group for refusing to bail her out,” he said.
• Because of his reluctance on the estimated R1 trillion nuclear deal

Nene reportedly said in August he would hold the line on the procurement of nuclear energy if it was not affordable and would reduce the public service’s head count to ensure spending stayed in line with fiscal targets. This was as he was reportedly under pressure to accede to a plan to procure nuclear energy.

Ndlozi said this was another reason for his axing. “Nhlanhla Nene was reluctant to approve the country’s new nuclear deal which Zuma wanted expedited so he can benefit before his term as president ends.”

Nomura International’s emerging markets economist Peter Attard Montalto said Nene was removed over disagreements over nuclear affordability and shareholder oversight of SAA.

Current DA leader Mmusi Maimane echoed these sentiments, saying it was common knowledge Nene had tried reining in excessive government spending, which caused a block when it came to the nuclear procurement deal and SAA.
• Because he allegedly denied a private jet for Zuma

In April there was controversy over the new VIP jets for Zuma and his cabinet at a cost of R2 billion, just after Nene announced revised spending plans to reduce waste. Then, later this year reports emerged there were plans to buy Zuma a jet worth an estimated R4 billion, which also prompted considerable backlash over whether the country could afford it.

Several people speculated Nene’s axing was because he apparently refused to approve purchasing a private jet for the president.

“Nene also refused to buy Zuma a new luxurious private jet and declined to grant Zuma’s staff exemptions from using expensive hotels and flying first class,” Ndlozi said.

Comedian Jem Atkins wrote a fake dialogue between the two:

“I wunt a beeeg jet!”

“No, sir. It is impossible”

“Step inside my office.”

“But why?”

‘Because you are f**king fired!”
Because ratings agencies are very close to giving South Africa a “junk” status

On Friday Standard & Poor’s credit ratings agency revised South Africa’s outlook from stable to negative, while Fitch Ratings downgraded South Africa’s international credit rating from BBB to BBB-. Platfields chief executive Bo Mbindwane tweeted: “Isn’t [sic] understand this noise. The rand will tank??? The rand has moved from 8ZAR to 14ZAR under Nene people! Downgrades occurred under him!!!”

Later in response to eNCA reporter Nickolaus Bauer, he said: “No. I see 3 downgrades under Nene, ZAR moving from 8 to 15 for $1. But I guess some of u see that as ok, food arms.” However, Montalto described the consequences of the axing as “profoundly negative” and certain to accelerate South African debt’s fall into junk status. He said it was obvious Nene’s firing had nothing to do with the downgrades. “Nene was praised by ratings agencies for core fiscal conservatism. The reasoning behind the downgrades was wider government policy and the lack of growth from wider policy.” — News24.

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