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Still no word on Nene's fate following offer of resignation

Oct 09 2018 06:17
Fin24

President Cyril Ramaphosa has still not officially responded to a reported offer by Finance Minister Nhlanhla Nene to resign.  

Nene was named finance minister in Ramaphosa's first Cabinet in late February, taking over from Malusi Gigaba. 

According to News24, Nene offered to resign in a phone call to the president. This follows revelations in his testimony at the State Capture Inquiry last week that he met with members of the Gupta family several times between 2009 and 2014. The finance minister had not previously acknowledged these meetings.

In statement following his testimony, Nene said the visits "cast a shadow on my conduct as a public office bearer. I deeply regret these lapses and beg your forgiveness".

While economists have started to speculate how markets would react if Nene goes, neither Ramaphosa nor National Treasury has officially responded on the offer to quit.

Investec Chief Economist Annabel Bishop told Fin24 on Monday that market reaction would depend on who takes Nene's place if he does leave Treasury. 

“Given the deterioration of SA's public finances this year, after close to a decade of overspending in a lower revenue environment, only a highly credible finance minister with a proven track record could turn market sentiment around for the rand.  

Ramaphosa will also have to keep in mind that SA is facing a credit rating review by Moody's on Friday. Moody's is the only one of the three major ratings agencies that has kept SA's sovereign debt at above investment grade.

“The timing is also poor given the credit rating review SA faces on Friday, and if a weak, compromised or unknown candidate replaces Nene, then Moody's may well decide to no longer extend the period of grace SA has enjoyed to consolidate its public finances,” said Bishop.

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