video Video

Zuma sacks minister, shocking markets

Thursday, December 10, 2015 - 01:42

South Africa's President Zuma has removed his Finance Minister, sending the country's currency to a record low. As Sonia Legg reports, Nhlanhla Nene's dismissal follows a credit rating downgrade by Fitch to just one notch above sub-investment grade.

▲ Hide Transcript

▶ View Transcript

A welcome promise from David Van Rooyen. South Africa's new and unexpected Finance Minister (SOUNDBITE)(ENGLISH) NEW FINANCE MINISTER, DAVID VAN ROOYEN, SAYING: "I will endevour to ensure that every policy is directed at creating favourable investment condtions, leading to the development of South Africa for all South Africans not just for a few." He's got a tough job. The sudden axing of his predecessor caused the rand to fall five percent against the dollar to record lows. (VOXPOP)(ENGLISH) LUCY FERREIA, SAYING: "Nhlanhla Nene knew kind of what he wanted to do and was trying to protect us from crisis and I think Zuma's action has just sent us into crisis." (VOXPOP)(ENGLISH) EMMANUAL KATANGA, SAYING: "There's a reason why Mr Zuma is president and I believe he has the right reasoning behind his firing of the ex-minister." It's been a difficult two years for Nene. South Africa's once booming economy has been struggling - partly thanks to falling commodity prices The further fall in the rand will only make matters worse, says Economic analyst Azar Jammine. (SOUNDBITE)(ENGLISH) ECONOMIC ANALYST, AZAR JAMMINE, SAYING: "Inflationary pressures are going to be a lot stronger than previously anticipated. The Reserve Bank is going to have to increase interest rates much more significantly than we thought and that means economic growth stands to be even weaker than we previously anticipated." The President didn't say why he had dismissed Nene. But it follows comments Nene made about one of Jacob Zuma's close allies - the chairwoman of state-owned South African Airways. He suggested Dudu Myeni had mismanaged a big deal with Airbus. Either way credit rating agencies are circling - a further downgrade to "junk" now perhaps on the cards.