Bloomberg News

Zuma Promotes Nhlanhla Nene to South Africa Finance Minister

May 25, 2014

South African President Jacob Zuma promoted Nhlanhla Nene to finance minister, while changing his mines and energy ministers in a new cabinet a day after being sworn into office for a second term.

Pravin Gordhan, 65, who was finance chief since Zuma’s first term began in 2009, was named minister to oversee local councils. Mcebisi Jonas, a provincial minister in the Eastern Cape province, was appointed deputy finance minister. Cyril Ramaphosa, deputy leader of the ruling African National Congress, was named vice president.

Zuma, 72, begins his final term in office with his ANC having won elections with the lowest margin of victory since it came to power two decades ago and the economy struggling amid a four-month long strike by platinum miners.

“Nene has got the credentials,” Colen Garrow, an economist at Johannesburg-based consultancy Meganomics, said by phone. “His appointment will largely go down well,” while Ramaphosa’s move into the government is “market-friendly,” he said.

Ngoako Ramathlodi, a former deputy minister of prisons, was named mines minister, replacing Susan Shabangu who was appointed womens’ affairs minister. Lynne Brown will take over as public enterprises minister, which controls the state-owned companies, including Transnet SOC Ltd., the ports and rail operator.

Tina Joemat-Pettersson, who was implicated by the nation’s corruption ombudsman in alleged irregularities in the awarding of government tenders as agriculture minister, will head up the energy ministry. She has denied wrongdoing.

Economic Posts

Zuma retained Trade and Industry Minister Rob Davies and Economic Development Minister Ebrahim Patel in the other key economic posts, while appointing Lindiwe Zulu, his former foreign affairs adviser, as head of a new small business development ministry.

Gordhan, 65, was widely expected to retain his post. During his term, he steered the economy through the first recession in 17 years, while fending off pressure from labor unions to increase spending in the face of a widening budget deficit.

The rand has gained 1.9 percent against the dollar since the beginning of January after sliding 19 percent last year and was trading at 10.2993 late on May 23.

Like Gordhan, Nene, 55, has stressed the need for the government to keep borrowing and inflation in check and bolster investment and economic growth. As deputy finance minister, he served on the committee that helped organize the 2010 soccer World Cup in South Africa and was chairman of the Public Investment Corp., Africa’s biggest money manager that invests the pension funds of government workers.

Jobless Rate

Economic policy in Zuma’s second term is focused on implementing the 20-year National Development Plan that seeks to cut the jobless rate to 14 percent by 2020 from 25 percent and boost the growth rate to at least 5.4 percent. Ramaphosa, 61, helped to draft the plan, placing him in a prime position to oversee its execution.

Nene became active in politics as a student in 1979. He worked for 15 years as an administrative manager for the Metropolitan Life Insurance Co., during which time he fought for better working conditions and helped organize South Africa’s first-ever strike in the financial services industry.

He became a local government councilor for the ANC in 1996 and held the post until 1999, when he became a member of Parliament. He served as co-chairman of the legislature’s joint budget committee and chairman of its finance committee.

He holds a marketing diploma, a Bachelor of Commerce honors degree in economics and a certificate in macro- and micro-economics from the University of London.

To contact the reporters on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net; Jaco Visser in Johannesburg at avisser3@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net Gordon Bell


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