Four possible reasons why Nene was fired

2015-12-10 14:05
Nhlanhla Nene (GCIS)

Nhlanhla Nene (GCIS)

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Johannesburg - 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.

1) Because of his reigning-in of South African Airways (SAA) and its chair Dudu Myeni

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 Democratic Alliance (DA) leader Helen Zille tweeted this was reason behind his axing.

"Nhlanhla Nene was reining in SAA. Was Dudu Myeni part of the reason he was fired?" she tweeted. 

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".

Economic Freedom Fighter's (EFF) spokesman 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 (UDM) 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. 

2) 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 reigning in excessive government spending which caused a block when it came to the nuclear procurement deal and SAA.

3) 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 Zuma. 

"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. 

Twitter users proposed the same idea with Nobantu Shabangu saying: "So because Nene refused to give the president more money for his private jet and SAA he was removed. Ja ne. Shem."

Comedian Jem Atkins wrote  a fake dialogue between the two: 

" 'I wunt a beeeg jet!'

4) 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.”

Read more on:    saa  |  jacob zuma  |  david van rooyen  |  nhlanhla ­nene  |  sa nuclear deal  |  economy

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