The South African president is much to blame for his country's woesby Justice Malala / February 18, 2016 / Leave a comment
On the evening of 9th December last year, South Africa’s President Jacob Zuma sent out a terse press statement dismissing his highly respected finance minister, Nhlanhla Nene. He replaced him with an unknown, David van Rooyen, a former small-town mayor.
The market’s reaction to the announcement was instant and brutal, leading to massive equity, bond and rand sell-offs. The rand plummeted against the US dollar and the pound and the South African stock market dropped by 2.94 per cent. Economists warned the move would destabilise an economy already struggling with high unemployment and slowing growth. Nene’s dismissal came only a week after ratings agencies had downgraded South Africa’s debt to one level above the dreaded “junk” status.
Zuma’s fellow leaders in the African National Congress (ANC) scratched their heads, wondering who the new minister was. Van Rooyen had no significant speeches or contributions to policy in his name. Apparently, no one in Zuma’s 35-strong cabinet knew about the appointment, even though they had been in a cabinet meeting just hours before the news was announced. Trevor Manuel, who served as Finance Minister in both Nelson Mandela and Thabo Mbeki’s cabinets, said of Van Rooyen: “Even I, as an MP for the period he served in Parliament from 2009 to 2014, when he was my fellow ANC member, battled to recall who he was.”
For many South Africans, the appointment was the Zuma administration’s latest grab for control of resources after a six-year assault on the country’s institutions. By installing a politically weak Finance Minister, Zuma was aiming for control of the national treasury. The week before Nene was sacked he had rejected two deals—a multimillion-dollar nuclear energy building programme and an attempt to renegotiate an Airbus deal by the state airline. He was widely known to be critical of the government’s overspending. Floyd Shivambu, Deputy President of Economic Freedom Fighters, a radical new political party, said Nene was removed so that Zuma could exercise complete control over the country’s finances.
“For many the ANC, the party of Nelson Mandela, is dismantling all the gains made since democracy dawned in April 1994”
In the end, though, Zuma bowed to pressure from international and local banks, other ANC leaders and…