Nene reshuffle worries banking association
The Banking Association of South Africa (BASA) has marked the removal of former Finance Minister Nhlanhla Nene by President Jacob Zuma on Wednesday evening as “very concerning”, particularly in light of the fact that the country had just been downgraded by ratings agency Fitch and was on a negative watch by Standard & Poor’s, with both agencies rating the country just one notch above junk status.
“The economy is not growing anywhere close to the growth rate we need to address poverty, unemployment and inequality. The rating agencies cited the performance of the National Treasury as a positive factor, particularly Treasury's efforts to curb public sector spending and manage the budget deficit.
“They also cited the intervention by Treasury in the South African Airways saga. In the midst of these problems and uncertainty, the Minister is fired and replaced by somebody who is not known by the markets, business or any other sector. The replacement has no experience in the area of finance, economics and global financial dynamics,” BASA MD Cas Coovadia said.
He added that the markets had already reacted negatively to this move, adding that the removal of Nene sent out a very worrying message to existing and potential investors at a time when the country desperately needs job-creating investment.
“We are not privy to the reasons for removing Minister Nene, but we urge his replacement, David van Rooyen, to keep to the course Minister Nene forged, under very difficult circumstances. Our country, and international investors, needs a degree of certainty that Minister Nene's policy trajectory and actions will continue,” Coovadia added.
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