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 percent. 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.”
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