Markets have reacted with cautious optimism to President Jacob Zuma’s appointment of Pravin Gordhan as South Africa’s new Minister of Finance – the third minister to hold the key portfolio in four days.
The replacement of previous incumbent Nhanhla Nene with the relatively-unknown David van Rooyen on Wednesday night sent shock waves around the country as markets reacted negatively and the rand tumbled.
Yesterday evening (13 December), the president backtracked, appointing the experienced Gordhan to the position and moving Van Rooyen to Gordhan’s portfolio of co-operative governance and traditional affairs.
Announcing the changes, Zuma said: “I have received many representations to reconsider my decision. As a democratic government, we emphasise the importance of listening to the people and to respond to their views.”
He says Gordhan, who was sworn in at 10h00 this morning, will ensure an even stronger alignment between the budget and the Medium Term Strategic Framework (MTSF) in the interest of stimulating more inclusive growth and accelerated job creation while continuing the work of ensuring that our debt is stabilised over the medium term.
He will also promote and strengthen fiscal discipline and prudence, and work with the financial sector to preserve its stability under the umbrella of the Twin Peaks reform, while ensuring that the National Treasury is more acceptable to all sections of our society, and adhere to the set expenditure ceiling while maintaining a stable trajectory of the debt portfolio, as set out in the February 2015 Budget.
Reacting to the news, DA federal leader Mmusi Maimane says the announcement is an admission that Jacob Zuma was “reckless and irrational to have fired Nhanhla Nene”.
He adds: “It is common sense to have in Cabinet a proven finance minister who brings fiscal discipline to the government. And we trust Minister Gordhan will continue to hold the line of former Minister Nene in respect of SAA and the nuclear build procurement deal.
“It is quite clear that the President did not anticipate the damage his decision would do to South Africa’s economy nor the backlash he would receive both from the public and from inside the tripartite alliance.”
Maimane says reports indicate that Nene was removed as Finance Minister because of his standing firm on the SAA Airbus deal and his attempts to delay the nuclear build procurement deal.
“Whilst we welcome the appointment of Pravin Gordhan as a move to restore some confidence in South Africa’s economy, it appears the announcement is merely a result of President Zuma having to bow to internal pressure,” Maimane says. “The criticism he has received both inside and outside the ANC shows that he is a president who has lost internal control of his party and who no longer enjoys public support.
“The cost of Jacob Zuma to our country has now reached its ceiling. Our country cannot continue to be led by a flip-flopping president who has complete disregard for the well-being of the country and its citizens.
“There was no need for South Africa to have had to endure the effects of the poor, irrational decision made on Wednesday. Unfortunately, it is the poor and unemployed who will bear the brunt of what the president has done.”