Zuma fast-tracked South Africa to junk status

Economists have slated President Zuma’s decision to remove finance minister Nhlanhla Nene, saying it has fast-track South Africa to junk status – as measured by the rating agencies.

Zuma removed Nene from the Finance portfolio in Cabinet, and replaced him with ANC member of parliament David Van Rooyen.

The news sent the rand plummeting against major currencies, hitting its lowest level ever against the US dollar shortly after the announcement.

The decision to remove Nene was widely criticized by business people, economists, and other political parties.

Democratic Alliance leader Mmusi Maimane said removing Nene was a reckless and dangerous move, which will further damage the country’s economy.

“Accompanied by no reasons for such a drastic move, one can only conclude that tonight’s action is yet another example of how President Zuma puts himself first and the country second,” said Maimane.

Maimane said Nene tried to reign in excessive government spending, which caused a block when it came to the nuclear procurement deal and SAA spending.

The EFF said Zuma appointed Van Rooyen because the new minister “will not stand up to him when he wants to do wrong things”, and because Nene “refused illegal instructions from Zuma and his friends in both business and state-owned enterprises”.

UDM leader Bantu Holomisa said he was not surprised by the decision, as the ANC leadership was “morally corrupt and intellectually challenged”.

ZAR per 1 USD
ZAR per 1 USD after Zuma’s announcement on Wednesday 9 December

Economists and business people slate Zuma’s decision

Economist Cees Bruggemans said the decision to replace Nene means South Africa will reach junk status next.

He said it also means that the nuclear deals will be approved, that SAA will go bankrupt, and the rand will hit R20 to the US dollar.

Bruggemans joked that the new forecast for the rand for 2016 is “moer toe” – an Afrikaans term for destroyed.

Companies editor at Business Day TV Giulietta Talevi said “not to be rude or pessimistic or anything, but Jacob Zuma has just fucked us”.

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Zuma fast-tracked South Africa to junk status