Economists herald new finance chief

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Johannesburg - The appointment of Nhlanhla Nene as the new minister of finance in President Jacob Zuma’s government was positively received by economists, although there were concerns that it was moving away from continuity.

Goolam Ballim, the chief economist of Standard Bank, described the situation as delicate and that there was a need for fiscal probity, especially at a time when South Africa was under a notable ratings watch and prospects for revenue growth appeared mediocre.

But he was quick to point out that there would be limited negative impact from a markets point of view because they had been accustomed to movements within Zuma’s previous cabinet, which had regularly made changes over the years.

“When one looks at the overall allocation of the portfolios, there seems to be a workmanship approach from individuals leading key ministries as these are held by senior individuals.

“One can judge the appointment of Malusi Gigaba to the Department of Home Affairs as further expansion of his breadth of experience and is likely to rise to a more prominent position in time.”

Ballim also explained that the emphasis on small business through the establishment of the Small Business Development Ministry was a profound signal of relative importance to the small business environment which had the potential to fuel job creation.

Crafting the ministerial portfolio should deepen small business in the economy, which would improve the micro-economic landscape, Ballim said.

Lumkile Mondi, the chief economist of the Industrial Development Corporation, said he was excited at Nene’s appointment but was disappointed at Siyabonga Cwele’s engagement as the new minister of telecommunications and postal services.

“This is great news. For the first time in 20 years we are seeing a person of African origin holding such a position. We have never had a person of African origin who understands the challenges of black Africans in South Africa. Key economic cluster portfolios have always been held by minorities who do not understand the challenges of blacks who are marginalised in business.”

Mondi added that Nene was competent and known in global financial circles.

Expressing his disappointment at Cwele’s appointment, he said telecoms was a new sector within the South African economy which would be key to driving growth, innovation and entrepreneurship.

“The sector needs someone who understands the industry and brings the digital economy to life. Cwele is not the right man for the job. The digital economy is sophisticated and Cwele falls short.”


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