Economist questions Nene removal

Economist Chris Hart says the decision by President Jacob Zuma to fire Finance Minister Nhlanhla Nene might have serious ramifications for the country’s economy

President Jacob Zuma made a shocking announcement on Wednesday night, when he told the country that he would be removing Finance Minister Nhlanhla Nene from his position.

“I have decided to remove Mr Nhlanhla Nene as Minister of Finance, ahead of his deployment to another strategic position. Mr Nene has done well since his appointment as Minister of Finance in a difficult economic climate,” a statement from the Presidency reads.

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Economist Chris Hart questioned the move.”Nene was recently appointed to this position. People had a degree of confidence in him. He certainly spoke the right language. Nene was competent. The decision to remove him from his post is strange. One has to wonder what is happening in the background,” he says.

He said that the decision was certainly not the correct one, considering that the country was in a critical phase, after being recently downgraded by ratings agencies.

The announcement also affected the value of the rand. The currency traded at R15,40 against the dollar, R16,34 against the euro and R22 against the pound yesterday.

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Hart believed that the decision might have ramifications for the markets and the country’s struggling economy. He hoped that the new minister would be able to restore investor confidence. “As we struggle more and more, we continue to press the wrong buttons,” Hart says.

The decision might also lead to the rand weakening further, he added.

It is still unclear why President Zuma made the sudden decision.

The DA said in a statement on its website that the decision to fire Nene was reckless and would have serious implications on the country’s economy.

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“Tonight’s firing of Nhanhla Nene has already had profoundly negative effects on the rand, which has plummeted since news of the announcement broke. This is sure to make the plight of the unemployed in SA even more difficult,” the party said.

The party criticised Zuma’s decision and asked for the reasons behind it.

“The appointment of David van Rooyen as Finance Minister provides no assurance that our economy is in safe hands. The fact that President Zuma waited until after last Friday’s rating assessments to make this decision shows that he knew this was a bad decision,” said the DA.

“By President Zuma’s own admission, Mr Nene has done well during a difficult  economic climate, so it makes absolutely no sense for him to be fired. President Zuma has again proven himself to be a President incapable of making the right decisions to set SA on a path to increased economic growth and job creation.”

Van Rooyen has held various leadership positions, including Executive Mayor of Merafong Municipality and Provincial Chairperson of the South African Local Government Association.

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