South African President Cyril Ramaphosa on Tuesday (October 9) appointed former central bank governor Tito Mboweni as finance minister, replacing Nhlanhla Nene who admitted to having meetings with the business family at the centre of corruption allegations.
Nene succumbed to pressure to resign after he admitted visiting the Gupta brothers, friends of scandal-plagued former president Jacob Zuma who have been accused of high-level influence-peddling, and failing to disclose the meetings earlier.
Initially he had asked President Ramaphosa to fire him, which the presidency ignored.
“After due consideration of the circumstances surrounding this matter and in the interest of good governance, I have decided to accept his resignation … and in the wake of Mr. Nene’s resignation I have decided to appoint Mr. Tito Mboweni as the Minister of Finance with immediate effect,” Ramaphosa declared.
The crisis over the finance minister had thrown a spotlight on Ramaphosa’s promise to crack down on corruption and boost economic growth.
South Africa has had four finance ministers in the last two years, with the rand and bonds reacting badly to the upheavals. But economist Dr. Azar Jammine sees no need for panick.
“When people start panicking that we are now going to have a new minister of finance to deliver the medium term policy statement, I think that is completely overblown. The fact is that much of the ground work has been done by a huge team of experts under Nene.”
“The actual numbers, which are the key issue the ratings agencies will be looking at, I don’t think are going to change one little bit, they were agreed upon a long time ago,” Jammine added.
The rand firmed moments before Mboweni was announced finance minister at a ceremony in Cape Town. Banking stocks closed more than one percent firmer.
The Gupta brothers – Ajay, Atul and Rajesh – have been accused of using their friendship with Zuma, Ramaphosa’s predecessor, to siphon off billions of rand in state funds and of inappropriately influencing cabinet appointments.