Rand drops as South Africa’s finance minister asks Ramaphosa to remove him

Lesetja Kganyago

Lesetja Kganyago

The decision, made by President Cyril Ramaphosa, comes after Nene chose to resign from the post on Tuesday morning following a public outcry sparked by his public apology last week over his multiple meetings with the Gupta family at their private home. "Ideologically and in terms of macroeconomic policy thinking, President Ramaphosa may have appointed the finance minister he always desired in his cabinet".

South African Finance Minister Nhlanhla Nene has asked President Cyril Ramaphosa to remove him after he admitted to visiting the home of the Gupta brothers, friends of scandal-plagued former leader Jacob Zuma, Business Day said on Monday, sending the rand lower.

The communist party praised Nene for refusing to hand South Africa over to what it called the highest bidder, by refusing to sign the nuclear contract, which former president Jacob Zuma wanted to enter into with Russian Federation.

Nene has become a divisive figure after testimony he gave at an inquiry into allegations of corruption by the Guptas, in which he admitted to the previously undisclosed visits.

Analysts had also started welcoming the news, saying that the move was good news because it showed Ramaphosa's leadership was serious about making a clean break with the past.

He made a public apology about the matter on Friday. He is the kind of person who will be able to take those decisions.

Ramaphosa has vowed to crack down on corruption as he tries to revive the economy and boost declining support for the ruling ANC party ahead of elections next year.

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Kondlo said Mboweni was likely to take a hard line against public sector wage increases, and could provoke friction with the country's influential trade unions.

The rand fell more than one percent on the report.

Zuma has also denied any wrongdoing.

The inquiry, which opened in August, is investigating allegations that Zuma organised the plunder of government departments and public enterprises in a scandal known as "state capture".

"Ramaphosa has sought to act swiftly to calm market jitters and demonstrate his ability to act on questionable conduct in his cabinet", Abdul Waheed Patel, the MD of Cape Town-based Ethicore Political Consulting, said by phone.

With government debt at already dangerously high levels and the country at risk of losing its sole remaining investment-grade credit rating from Moody's Investors Service, Mboweni will have little option but to stick to the National Treasury's expenditure ceilings and deficit-reduction targets.

The new finance minister, Mr. Mboweni, is seen as a safe pair of hands.

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