South African President Jacob Zuma handled his removal of former Finance Minister Nhlanhla Nene “very badly,” according to former central bank Governor Tito Mboweni, who said it will take time to restore investor confidence in the country.
Zuma changed his finance minister for the second time late Sunday, reappointing Pravin Gordhan. The president provoked outrage and roiled markets on Dec. 9, when he fired Nene, who had held the post for about 18 months, replacing him with little-known lawmaker David van Rooyen. The rand slumped to record lows and yields on government bonds climbed to the highest in seven years.
“Whoever advised him needs to be sacked and fired immediately,” Mboweni said, referring to Zuma, in an interview with Bloomberg Television’s Guy Johnson and Jonathan Ferro from Johannesburg on Monday. “It will take a bit of time before we can claw back all that we’ve lost as a result of the poor decisions of the past couple of days.” Mboweni served as the central bank’s governor for a decade until 2009.
Gordhan, who served as finance minister during Zuma’s first term as president from 2009 to 2014, will have to ensure that South Africa limits spending to keep debt from exceeding 45 percent to 50 percent of the country’s gross domestic product, Mboweni said. Gordhan should also show that South Africa respects its independent institutions such as the central bank and the judiciary, he said.
Gordhan will have to insist “that there will be no cronyism and that no one will be allowed to take South Africa tax payers for granted,” Mboweni said.
Zuma, 73, initially gave no reason for removing Nene. The Minister in the Presidency, Jeff Radebe, said other cabinet members weren’t informed of the president’s plans. Two days after firing Nene without giving any reason for the move, Zuma said Dec. 11 that the former minister would be nominated as the head of the African regional center within the Brics New Development Bank.