Veteran Indian-origin politician Pravin Gordhan, appointed South Africa’s new Finance Minister by President Jacob Zuma after he fired two of his predecessors within a week, on Monday vowed to stabilise the country’s wobbling economy, the second-largest in Africa.
“We are not going to make reckless decisions. We are going to ensure that the kind of discipline that government has demonstrated since 1994 is the kind of discipline that will continue and nobody needs to fear that we will move in any other direction,” 66-year-old Gordhan told reporters after his appointment.
Gordhan’s appointment came after a huge controversy with mounting pressure on Zuma to quit after he dismissed Nhlanhla Nene as Finance Minister, without giving reasons, drawing widespread criticism even from within the ranks of his own African National Congress.
Zuma replaced Nene with the little known David van Rooyen. The country’s currency, the Rand, plummeted to new lows as the news broke. Credit agency Fitch downgraded South Africa on December 4, leaving the continent’s second-largest economy after Nigeria just one notch above junk status.
Later, Zuma tried to bring about some calm by saying that Nene had been removed because he was in line for a top position at the new BRICS Bank. Gordhan’s appointment sent the Rand up almost 5 per cent last night, but failed to quell a tide of criticism of the president.
Gordhan was widely respected when he served as South Africa’s finance minister from 2009 until 2014. As soon as he assumed power, Gordhan vowed to put the South African economy back on track.
“We will stay the course of sound fiscal management. Our expenditure ceiling is sacrosanct. We can have extra expenditure only if we raise extra revenue,” Gordhan said. “The facts about the developments that took place last week and the response of the financial markets are well-known. Our currency fell, the stock market dropped by 2.94 per cent and bond yields shot up by over 150 basis points,” he said.