South African President Jacob Zuma promoted deputy finance minister Nhlanhla Nene to finance minister on Sunday, replacing the widely respected Pravin Gordhan in a new cabinet line-up to start a second five-year term in office.
The day after a glitzy inauguration in Pretoria, the 72-year-old Zuma also confirmed millionaire businessman Cyril Ramaphosa as his deputy president, a decision likely to go down well with investors and the private sector.
Mining minister Susan Shabangu, who has been criticized for her handling of a strike in the platinum mines now in its fifth month, was replaced by Ngoako Ramatlhodi, a lawyer and former deputy minister in the prison service.
Nene, 55, has been number two at the Treasury in Africa’s most advanced economy since 2008 and is seen as a capable technocrat familiar to domestic and international investors. His first name means ‘Luck’ in Zulu.
He was a union shop steward in the early 1990s but since the end of apartheid in 1994 has worked his way up through the ranks of the ruling African National Congress (ANC), first in local government and then on parliamentary financial committees.
Although there are no doubts about his technical ability, some analysts said his lack of political muscle – especially compared to Gordhan and his predecessor Trevor Manuel – could undermine the Treasury’s ability to continue to reduce South Africa’s budget deficit after a 2009 recession.
“What I question about him is if he can hold his own in terms of policy ideology or if he is going to be imposed on more by the ANC,” said Peter Attard-Montalto, an economist at Nomura in London.
However, others said Nene’s succession to Gordhan, who is being sent to tackle South Africa’s shoddy local government as minister for Cooperative Governance and Traditional Affairs, should not cause too many ructions.
“Given Nene’s longstanding Treasury experience, there will be a sense of policy continuity,” said Razia Khan, head of Africa research at Standard Chartered in London.
“Investors will be reassured that not much is likely to change in terms of overall policy direction – that its essential centrist, market-friendliness will remain in place.”
Renowned as an engaging communicator, Nene may even ease some of the distrust that exists between the government and private sector.
“He’s a good listener and more than anything else we need to open up communications between business investors and government,” said Chris Hart, an economist at Investment Solutions in Johannesburg. “Nene will be able to facilitate that very, very strongly.”
As he announced his new cabinet, Zuma stressed the need to breathe new life into the flagging economy in order to make a dent in 25 percent unemployment and address the many destabilizing social legacies of decades of white-minority rule.
Zuma’s main strategy is to promote a National Development Plan drawn up as a blueprint for long-term growth during his first term but slated by South Africa’s powerful union movement as too business-friendly.
More immediately, 58-year-old new mining minister Ramatlhodi faces the daunting task of resolving a strike in the platinum mines that is now in its fifth month – the longest bout of industrial action in South African history.
Five people have been murdered in communities around the platinum mines northwest of Johannesburg in the last week, and the latest round of wage negotiations, mediated by a labor court judge, have made little headway.
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