Nene axing fallout growing

2015-12-11 10:45
Justice Sisi Khampepe swearing-in David Douglas van Rooyen as Minister of Finance while President Jacob Zuma looks on at the Union Buildings in Pretoria.

Justice Sisi Khampepe swearing-in David Douglas van Rooyen as Minister of Finance while President Jacob Zuma looks on at the Union Buildings in Pretoria. (GCIS)

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

Video

The sudden firing of Nene is unacceptable - respected businessman

2015-12-11 08:01

Managing Director of the SA Ubuntu Foundation and former banker, Kevin Chaplin, tells us why he is "so saddened" by the firing of Finance Minister Nene.WATCH

Pietermaritzburg - Opposition parties reacted with ­horror, the rand weakened to record lows and bank share prices plunged after ­President Jacob Zuma fired Finance Minister Nhlanhla Nene.

Zuma’s surprise appointment of ANC MP David van Rooyen as Finance ­minister saw the rand slump — it fell 2,85% to R15,33 per dollar yesterday ­afternoon and was at R15,42 last night.

Van Rooyen, who was sworn in at the Union Buildings, spoke of the enormity of his new job.

“As you are all aware, mine is a colossal assignment coming at a time when the global economic outlook is not ­favourable, more especially for emerging markets,” he said.

On the JSE, an index of the six major banks fell as much as 12% to levels last seen in the 2008 global recession.

“All the banks are built on confidence — removing the Finance minister isn’t good for the country’s confidence,” said Patrice Rassou, head of equities at ­Sanlam Investment Management.

The rand slid to R15,38 per dollar on Wednesday night, soon after the announcement of Nene’s removal.

Nene is being deployed to another “strategic position” that would be ­announced in due course.

The South African Chamber of ­Commerce and Industry wants Zuma to explain Nene’s removal.

“The unexpected removal of Nene … is of grave concern to the business sector, especially as it comes only days after the downgrade of SA’s credit rating to just one level above speculative grade or junk,” the Association of Savings and ­Investment South Africa said.

FNB analyst John Loos told The Witness the removal of Nene does not impact consumers directly in the short term, but its impact on investor confidence was reflected in the weak rand.

“Our currency is like the share price value of our country and it’s deteriorating,” said Loos.

Nene’s removal was criticised by some political parties. DA leader Mmusi ­Maimane said it was a “dangerous and reckless move” by Zuma.

UDM leader Bantu Holomisa ­believed Zuma’s relationship with SA Airways chairperson Dudu Myeni had a role to play.

“We know Nene was dressed down by this lady in an ANC study group for refusing to bail her out. It is the same morally challenged leadership that wanted to roll out a ­nuclear programme that Nene did not condone,” Holomisa said.

The EFF called the appointment of Van Rooyen “a sign of a serious ­pathological crisis in the leadership and direction of the country”.

EFF spokesperson Mbuyiseni Ndlozi described Van Rooyen as an ­­“unknown, inexperienced, sophomore … with ­questionable political credentials”.

Johan Kruger, deputy general ­secretary of the Solidarity union said: “Van Rooyen by no means has the ­experience and political and economic insight to solve the country’s financial and economic crises”.

Kruger said a dark cloud also hung over Van Rooyen’s municipal ­management abilities.

Van Rooyen was mayor of the struggling Merafong Municipality in Gauteng — under his management Merafong received several successive qualified audit opinions that included non-compliance with regulations and legislation.

Economists believe Nene was ­removed from his post for political ­reasons, including his reluctance to fund the R1 trillion nuclear build programme, his inquiry into the squandering of funds at the SABC and his ruling against SAA in negotiations with Airbus.

Van Rooyen served as the Whip of the Standing Committee on Finance and as Whip of the Economic Transformation Cluster.

The move comes less than a week after credit-rating companies pushed SA closer to junk status, citing concerns over a weak economy and rising debt.

“Especially at this point in time, we can ill afford to antagonise international investors. An event of this magnitude can even be the catalyst for a credit-rating downgrade to junk status. It could lead to a complete loss of investor ­confidence in South Africa, which could push us into a recession,” said Mohammed Nalla, head of strategic research at Nedbank Group.

“The markets are worried about the possibility of another downgrade by credit ratings agencies and that it could increase the cost of funding for South African banks,” Old Mutual Investment Group analyst Neelash Hansjee said about the slump in bank share prices ­yesterday. — Fin14 and Reuters.
Read more on:    pietermaritzburg  |  finance minister

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

Inside News24

 
PARTNER CONTENT
INFOGRAPHIC: New thinking required for retirement

Everything we believe about retirement is fast becoming outdated.

PARTNER CONTENT
WATCH: How education can change a life

A university education gives students the chance to create a better future for themselves, their families and to opportunity achieve their dreams.

/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.