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Three finance ministers in a week

After just four days, David van Rooyen has been removed from his position as South Africa’s Finance Minister as President Jacob Zuma reinstated former Finance Minister Pravin Gordhan to the post. This after he stunned the nation last week when he sacked Nhlanhla Nene in a much contested move that saw the value of the rand depreciate substantially, dipping below R16 to the US dollar.

Although the presidency has been extremely vague as to why it made the decision to axe Nene in the first place, it has been clearer on this latest decision saying, “As a democratic government, we emphasise the importance of listening to the people and to respond to their views.”

Zuma goes on to say he had to “reconsider his decision to remove Nene and appoint Van Rooyen.”

There has been massive pressure from business and politicians, even in his own party, for Zuma to reverse his decision that caused the currency to freefall and a R169bn drop in JSE share values.

The statement continues with:

“[Gordhan] will lead government again in the following;

  • Ensuring 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.
  • Promoting and strengthening the fiscal discipline and prudence that has characterised our management of public finances since the dawn of freedom.
  • Working with the financial sector so that its stability is preserved under the broad umbrella of the Twin Peaks reform.
  • Ensuring that the National Treasury is more acceptable to all sections of our society.
  • Adherence to the set expenditure ceiling while maintaining a stable trajectory of our debt portfolio, as set out in the February 2015 Budget.”

MoneyWeb has called the move “an attempt at damage control before the markets open.” It will indeed be interesting to see how the markets react, however Gordhan was a respected finance minister and the hope is that this move will stabilize the currency and mitigate any longer-term economic impact this week may have had. This should be good news to local industries.

Twitter has also been abuzz with people expressing their surprise at this next step in what has been a very interesting week in the South African economy.

Gordhan’s current post as Minister of Cooperative Governance and Traditional Affairs will now be filled by van Rooyen.

Reaction from Twitter

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