Nene resignation sets standard for Cabinet ministers, says Wits economist

Cabinet ministers must take a leaf out of former Finance Minister Nhlanhla Nene's book and resign if they have made a mistake, says Professor Jannie Rossouw, head of Wits School of Economics and Business Sciences.

Cyril Ramaphosa on Tuesday accepted Nene's resignation and appointed former Reserve bank Governor Tito Mboweni as his successor. This followed Nene’s testimony before the State Capture inquiry last week, in which Nene revealed he had met with the Guptas several times between 2009 and 2014.

According to Ramaphosa, the former finance minister said there was a "risk that the developments around his testimony" to the commission would detract from the important task of serving the people of South Africa, especially as government is working to reestablish public trust. On these grounds, and in the interest of good governance, Ramaphosa accepted the resignation.

'The Nene standard'

Speaking to Fin24 by phone on Wednesday morning, Rossouw said it was important to honour Nene. "You do not kick a person when they are down," said Rossouw.

Nene led by example and set a new standard for Cabinet ministers, Rossouw said. "I'd like to call it the Nene Standard, or benchmark or rule."

This echoes views of the president, who at the briefing said Nene’s decision to resign was a measure of his character and commitment to serve the interests of the country.

The move comes just two weeks away from the mini budget to be announced on October 24.

Rossouw, a former Reserve Bank economist, worked with Mboweni during his term as governor. He expressed optimism in Mboweni's appointment.

"I am very positive about his appointment," he said.

Rossouw said that if Mboweni had to introduce changes to the mini budget, it would only be marginal. He also said that any changes to the mini budget would relate to the economic stimulus package announced by the president last month.

Earlier this week, several economists expressed the view that there would not be major deviations to the mini budget if a new finance minister were to be appointed.

Nene had served the government and people of SA with diligence and "under difficult circumstances", and he had come under "great pressure", said Ramaphosa.

RMB Head of Research Nema Ramkhelawan-Bhana told Fin24 that the mini budget was meant to communicate if Treasury had stuck to its prescribed targets, set in the national Budget, and any amendments would be in line with these targets.

She also stressed that there was an entire team at Treasury who worked on the budget, not just one individual.

Dr Azar Jammine, chief economist at Econometric, expressed similar views. "There’s a whole team at Treasury working on the mini budget. It won’t affect it one iota," he said.

Ramaphosa told reporters that Mboweni would be taking over from Nene at a critical time, when the country needed to prioritise economic growth, increasing investment and job creation.

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