Where there’s smoke, there’s fire. Such was the response of many a cynical South African when learning about Nhlanhla Nene’s hush-hush trysts with the Gupta family.
The Minister of Finance portfolio in South Africa is understandably a high-profile position, given the ailing economy. Who will be our hero? Who will pull South Africa up out of the quicksand? And given the fact that whoever took this hot seat would undoubtedly be in the spotlight for much of their tenure, it was a little surprising that Nene rarely featured.
He seemed to keep his head down. He was cautious and inoffensive – a far cry from his imbecilic and blatantly corrupt predecessor, Minister of the Gram, Malusi Gigaba.
So, to the dwindling optimistic among us, the last couple of days have come as a bit of a shock. We’ve watched Nene’s virtue come unravelled amidst the revelation that he had, in fact, engaged in meetings with the controversial Gupta family during his previous stint as Minister of Finance under Jacob Zuma – meetings that he had decided not to disclose upon his reinstatement to the Finance portfolio.
Of course, it is noteworthy that Zuma had fired Nene from the position back in 2015 and replaced him with the bumbling Minister of Weekend Specials, David Van Rooyen. Perhaps there’s something to be said about that.
Zuma, after all, was known to surround himself only with corrupt allies.
After these revelations, the South African economy took one to the chin on Monday morning, with the rand only barely avoiding reaching R15 to the US dollar for the first time in weeks.
The next day, Nene offered to step down from his position amid mounting pressure and public outcry, and we saw the long-suffering rand enter a state of limbo as markets grew more and more uncertain over his future.
President Ramaphosa had little choice but to accept Nene’s resignation, and made quick work of finding his replacement.
South African’s breathed a sigh of relief as Tito Mboweni was announced as the new finance chief.
Mboweni – the man whose signature once graced your crisp banknotes, back when they were still worth something – had previously held the post of governor of the South African Reserve Bank. Thereafter, he acted as an advisor for Goldman Sachs and also served as the chairman for AngloGold Ashanti.
So, he comes with a wealth of experience, and economists have not only welcomed his appointment but also hailed it as a ‘safe choice.’
Known for his tenacity, Mboweni has long been a favourite to take on the Minister of Finance position. It’s a little bit surprising that it hadn’t happened sooner.
On Mboweni’s appointment, analyst of Rand Merchant Bank, Nema Ramkhelawan-Bhana, said:
Oil prices are elevated. The prices of petrol and diesel continue to soar, and the weaker our rand gets, the more we’ll see a rise in costs of imports, such as fuel.
The only upside to having a dismal currency, it could be argued, is that it benefits the tourism and export sectors.
That’s right, tourists; bring us those big daddy dollars.
With Ramaphosa draining the ANC swamp – and putting out all those Zuma Fires – there’s no doubt that Mboweni will have his work cut out for him.
Restoring consumer faith in the economy, balancing SA’s books, appeasing the ratings agencies and reassuring markets of our discipline, capability and dedication – it’s all in a day’s work.
And then, of course, the medium-term budget speech is just around the corner.
So, the timing is less than ideal.
With Mboweni at the helm, hopefully we’ll see things turn for the better.