Banks worried over finance minister

The Banking Association of South Africa is concerned at the removal of Nhlanhla Nene as finance minister.

CApe Town - The Banking Association of South Africa on Thursday expressed concern at the removal of Nhlanhla Nene as finance minister and the lack of experience of his replacement David van Rooyen.

“The sudden Cabinet reshuffle announced by President Zuma last night, removing Minister Nene as finance minister is very concerning.”

The association's managing director Cas Coovadia noted, though ratings agencies last week downgraded South Africa's credit rating to one notch above junk status, they had commended National Treasury's commitment to fiscal consolidation.

“The economy is not growing anywhere close to the growth rate we need to address poverty, unemployment and inequality.

The rating agencies cited the performance of Treasury as a positive factor, particularly Treasury's efforts to curb public sector spending and manage the budget deficit. They also cited the intervention by Treasury in the SAA saga.

“In the midst of these problems and uncertainty, the minister is fired, and replaced by somebody who is not known by the markets, business or any other sector.

The replacement has no experience in the area of finance, economics and global financial dynamics,” Coovadia added. He said Nene's removal had sent a very concerning message to investors at a time the country could least afford it.

“We are obviously not privy to the reasons for removing minister Nene, but we urge his replacement, David van Rooyen, to keep to the course Minister Nene forged, under very difficult circumstances.

“Our country, and international investors, needs a degree of certainty that minister Nene's policy trajectory and actions will continue.”

AFRICAN NEWS AGENCY