Many were shocked at last night's announcement of South African Finance Minister Nhlanhla Nene's (pictured) sacking by President Jacob Zuma. In a seemingly unanticipated move, Zuma has appointed David van Rooyen into this post instead, saying simply that Nene will be deployed elsewhere.
The official statement by the President said:
"I would like to announce changes to the Finance portfolio in Cabinet.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 during a difficult economic climate. Mr Nene enjoys a lot of respect in the sector locally and abroad, having also served as a deputy Minister of Finance previously... The new deployment of Mr Nene will be announced in due course."
This past week, South Africa's credit rating was slashed, leaving us one point above "junk" status.
There are legitimate concerns about the ramifications that Nene's sacking will certainly have, least of all for the country's already struggling economy. Indeed, the rand immediately fell to other major currencies, hitting its lowest-ever level against the dollar. Several of the country's leading economists and politicians have publically aired their concerns, including economist Cees Bruggemans, who is convinced the decision to replace Nene means South Africa will reach junk status next.
