The flip-flopping of finance ministers is a sign that President Jacob Zuma has lost it completely, economist Dawie Roodt told Fin24 on Sunday.
“This is a mess-up of epic proportions. It is like we’re living in Alice in Wonderland.”
The Presidency announced on Sunday night that Pravin Gordhan, until Sunday Minister of Co-operative Governance and Traditional Affairs, will be returning as finance minister just four days after relatively unknown ANC MP David van Rooyen was sworn in to replace Nhlanhla Nene. Nene was abruptly and unceremoniously removed from this position on Wednesday.
Van Rooyen will now take over Gordhan’s previous portfolio, while Nene was nominated for a top position at the new Brics development bank, News24 reported.
“It isn’t about Gordhan or Nene or Van Rooyen. It is about Zuma. He thinks that he can fix it all but he can’t. He can’t fix the damage.
“I can’t see how on earth Zuma is going to survive as president of South Africa. He must go. He is a disgrace,” charged Roodt.
The rand firmed to as low as R14.94 and was trading in a broad range between R14.9420 – R15.8847 in overnight trade in New York from Friday’s close of R15.8952. The unit briefly tested R16/$ on Friday.
“Short-term this SHOULD stabilise the rand but long-term it shows a government under immense pressure and a loss of control along with a leader who seems at odds with his own party,” Brett Birkenstock, director at Overberg Asset Management, told Fin24 on Sunday.
“Obviously Mr Gordon is an extremely suitable candidate and will be well received as finance minister. However, the question I would pose from a global sense would be what credibility and consistency does this move give the South African government?
“Playing musical chairs with arguably the most important position in the country does not send a stable and consistent message,” said Birkenstock.
He said the news may be poorly received “not for the appointment, but by the panic and loss of control the constant switches represent”.
Roodt warned that should Gordhan take on this new appointment, it will tarnish his credibility.
“If Gordhan accepts then it will indicate that he is just a pawn. He is only there to save Zuma’s skin.”
Economist Mike Schussler told Fin24 this about-turn makes Zuma look weak. “The leader looks like a rabbit in headlights.”
He said while Gordhan comes across as a strong leader who will likely inspire confidence in investors, the ANC will have to regroup.
Schussler said the rand will retrace at least 70% of its recent slump but “we are now looking weak and junk status still looks likely… we probably delayed it with at least a year”.
“These quick changes show how vulnerable we are and how much the minister is worth.” News24