Opinion
South Africa: The removal of Finance Minister Nhlanhla Nene is bad news for the country
The removal of Minister Nene is a significant act. The fact that he has been replaced by someone who is unknown and untested simply compounds it. The first risk is that the new regime has a massive negative impact on the country’s financial credibility. This will be hard to repair under the current political leadership. It will be even more damaging if the governing African National Congress (ANC) does nothing to correct the situation.
Secondly, it is widely believed that Nene was removed because he refused to allocate national resources carelessly. There is therefore a distinct possibility that his successor was chosen because he is not expected to be so careful.
The country’s fiscal status could deteriorate, further damaging our reputation. This will further weaken the currency, raise the cost of borrowing and discourage local and foreign investment in an already investment-starved environment. It is a very serious situation.
Alan Hirsch is director of the Graduate School of Development Policy and Practice at the University of Cape Town. The original version of this article was published in The Conversation.
