Economic fallout

WE HAVE now had three finance ministers in a few days. Pravin Gordhan was re-appointed as finance minister following a turnaround by President Jacob Zuma, who removed novice David van Rooyen whom he had appointed five days ago. This after firing the respected Nhlanhla Nene.

Some analysts viewed the removal of Nene as a result of disagreements over nuclear affordability and shareholder oversight of SAA.

It then came to light that shortly before Nene’s fate was announced, the cabinet decided to approve the start of the controversial nuclear procurement programme. This has apparently cleared the way for the Department of Energy to call for proposals to provide South Africa with 9.6 gigawatts of nuclear power without first doing a cost-benefit analysis.

Whatever the reason for Nene’s sacking, the move prompted something of an economic meltdown. One economist called the move the biggest “disaster” of his career, and the exchange rate touched a record low of R16 to the dollar on Friday.

The news of Gordhan’s appointment on Sunday night prompted a rally in the exchange rate and was welcomed by a range of experts.

However, in yet another twist, no sooner had the experienced Gordhan taken up the position as head of the Treasury, when reports about the South African Revenue Service’s “rogue intelligence unit” and whether he was aware it was spying illegally on taxpayers during his previous term, began to appear again. Gordhan has denied any knowledge of the unit.