With the re-instatement of Pravin Gordhan having stabilised the Rand and prices of SA financial assets, the public attention has moved along to Thursday’s State of the Nation speech and next week’s National Budget. For the moment, the spotlight has moved away from former Finance Minister Nhlanhla Nene, who lost his job by resisting crony patronage. Now unemployed after resigning as an ANC MP last week, Nene is waiting to take on a supposed critical position at the African unit of the Brics Development Bank. But this much publicised political initiative is taking an awful long time to get off the ground. With the easy money tide having receded, the obvious question now is where the institution will get its funding. Russia and Brazil are in even worse financial straits than cash-strapped SA and India has massive internal priorities requiring every cent at its disposal. And China, the once obvious benefactor, is struggling to cope with moving its economy from exports to a domestic focus; from investment to consumption; and from manufacturing to service – a triple challenge that is eating away at its rapidly declining reserves. President Jacob Zuma says the reason for replacing Nene was to propose him for a position which former Finance Minister Trevor Manuel said was “only 15%” of his previous responsibility. There is much Zuma needs to explain in his SONA including why, two months later, the able Finance Minister is twiddling his thumbs at home. Indeed, it is now a moot point whether Nene will ever have a proper job to do there. With all of the Brics hitting serious cash flow issues, the last thing their Treasuries will be supporting right now is funding a new African unit of their apparent Development Bank. So if its funding will have to come from Pretoria, why is it needed at all when there is already the Midrand-based Development Bank of SA and the African Development Bank in Abidjan. – Alec Hogg
By Matthew le Cordeur
Cape Town – Amid an economic downturn caused by domestic political uncertainty, global financial instability and a critical regional drought, former Finance minister Nhlanhla Nene has emerged with his integrity intact.
Popular amongst his staff at National Treasury and with the broader business community, the former Member of Parliament (MP) has been described for his political bravery and tough stance on fiscal discipline.
While his nerves of steel against President Jacob Zuma’s many controversial requests (think nuclear plan and SAA) seems to have cost him his job in December 2015, Nene told the Sunday Times that he is content at home in KwaZulu-Natal, while he waits for a potential job at the Brics New Development Bank.
“There is no panic from me at the moment,” he told the Sunday Times. “As South Africans, it’s time we allowed the situation to stabilise. We have a new minister of finance and government has stabilised right now. I must also be given space to move on.”
Zuma’s official line when he removed Nene was that he was being nominated to take on a senior bank role created by the Brazil, Russia, India, China and South Africa (Brics) coalition, but no developments have emerged of this proposal.
Read also: Nene Twist: Was he sacked for saying NO to Al-Bashir?
Analysts, commentators and opposition politicians find it puzzling that Nene needed to step down until such a position had been finalised.
While last year’s state of the nation address by Zuma was interrupted by calls for him to “pay back the money” on his Nkandla residence, his address this Thursday will likely be interrupted by calls for him to explain why he truly dumped Nene.
Following news on Friday that Nene had resigned as an MP in December, Moloto Mothapo, spokesperson for the ANC Chief Whip, said Nene served with “distinction and dedication”.
Resignation ‘proves his deep integrity’
Peter Attard Montalto, emerging markets economist of Nomura, told Fin24 that Nene’s departure as an MP “proves his deep integrity”.
“He has come through this rough past month with his standing enhanced,” he explained. “He clearly does not want to speak out yet (on his ousting as minister), though (he) gives a subtle hint as to the uncertainty of (whether) this Brics nomination is real or not.”
Read also: Zuma on Nenegate: “Markets over-reacted to the firing.” Rand tanks again.
“I think (this) shows that whilst battle lines are forming within the ANC, they are not set yet,” he said. “I’m confident (that) when the time comes, he (Nene) will (explain his position) in a calm and measured way.”
Former Democratic Alliance (DA) leader and Western Cape Premier Helen Zille tweeted that “sadly, Nene follows many of the ANC’s best. (A) bad day for SA.”
David Maynier, DA MP and shadow minister of finance, said the resignation of Nene as an MP “after a long and distinguished career in the finance family is a blow to Parliament”.
“The former minister paid a high price for doing the right thing and speaking truth to power, and in the end sacrificed his seat because he was not prepared to sacrifice his integrity.”
Maynier believes the suggestion that he would be appointed to the Brics bank is “increasingly looking like a blatant lie manufactured to explain away the catastrophic decision to fire him in 2015”.
“Whatever the case, President Jacob Zuma will be under massive pressure to explain why he fired the former minister during the State of the Nation Debate beginning on 11 February 2016 in Parliament.”
Read also: Kgalema Motlanthe: ANC members stunned by #Nenegate, don’t understand logic
SA plunge into junk status is looming – Cope
Cope leader Mosiuoa Lekota said on Sunday that Nene’s firing meant South Africa’s looming dip into junk status was becoming a reality.
“Businesses face closure, young people have diminishing hopes of finding jobs, the economy is taking a battering, the national debt is threatening to go past 50% of GDP, the cost of servicing the national debt is becoming impossible by the day and South Africans are having to pay very dearly for Zuma’s inexplicable and stupid firing of Minister Nene.
“Junk status for South Africa’s sovereign bonds is now a looming reality.”
“The country is now in a state of crisis,” he said. “A crisis is defined as ‘a dangerous or worrying time’ or ‘a critical moment’.
“That is indeed what South Africa is experiencing,” he said. “The rand has become puny. Social tensions are reaching a boiling point. The lack of visionary and moral leadership is showing.” – Fin24
Source: http://www.fin24.com/Economy/nene-praised-for-integrity-and-excellence-20160207
