President Jacob Zuma has said that he has spoken to economists who could not convince him that Treasury would have collapsed had David van Rooyen remained in his appointment as minister of finance.
On Monday (11 January) the rand was in recovery mode again having hit R17.99 – a new record low – against the dollar late on Sunday night as Asian markets opened.
This followed a major sell-off out of Japan, and remarks from the Zuma that markets overreacted and people exaggerated when he sacked finance minister, Nhlanhla Nene.
Zuma infamously sacked Nene in December 2015, replacing him with unknown ANC back-seater, David van Rooyen. This led to a collapse in the market, pushing the rand to record lows against the dollar.
Following emergency meetings with senior ANC leadership and the South African banking sector, Zuma back-tracked and replaced Van Rooyen with former finance minister Pravin Gordhan three days later.
Zuma called the market reaction – and the reaction from politicians, business leaders and South African citizen – an “overreaction”.
“People did not consider many things,” Zuma said. “The rand had been going down when Nene was there. It had been going down for months and months. It was not triggered by the decision (to remove Nene).”
“The removal of Nene was ‘not breaking the economy’…People didn’t understand what was happening and they exaggerated the issue,” he said.
Zuma told the SABC in an interview on Sunday: “He (van Rooyen) was going to come into a very effective, functioning department. I don’t know why people thought that when he comes in, the treasury is going to fall down. I don’t understand.
“I have talked with a few economists, they can’t convince me that the department was going to fall. We are talking about perceptions, that is why I am saying that it was an over-reaction really, from my point of view.”
The dangers of an uneducated president
Prince Mashele, executive director of the Centre for Politics and Research, said that having an uneducated president in charge of the economy is bad news for the country.
Mashele was speaking in an interview with Talk 702, where he noted that the ruling ANC is in a vulnerable position, and is at risk of losing “one or two very big metros” in the 2016 municipal elections.
In the interview, Mashele also expressed his concern for the economy under president Zuma.
Mashele said that Zuma’s position on the economy, and his failure to understand it are exacerbating the country’s woes.
“It is very dangerous to have an uneducated president”, Mashele said.
“We don’t need any more evidence of the dangers of an uneducated president…He can’t read numbers.”
“To have a guy who is illiterate when it comes to economics lead a sophisticated economy like ours – that is in dire straits – you must know you are going nowhere,” he said.
More on Zuma