JOHANNESBURG - Former president Jacob Zuma’s ruinous leadership led to many unpopular decisions that plunged South Africa into a series of crises and led to the continental superpower’s credit rating downgraded to junk status.
When Zuma took over as president in May 2009, the economy was fairly stable with the rand trading at R8 levels to the US dollar. But that sentiment on Africa’s largest and most diversified economy quickly changed when Zuma would “irrationally” reshuffle his cabinet, in some cases appointing little-known ANC backbenchers to critical posts such as the finance ministry, unsettling the markets and sending the local currency on a downward spiral.
Zuma presided over an unprecedented unemployment rate of 27.7 percent, which recently went down 26.7 percent. And while South Africa’s business confidence index averaged 100 index points in 2015, it went down before improving 3.3 index points to the current 99.7 percent, moving closer to levels last seen before Zuma unceremoniously fired Nhlanhla Nene as finance minister in December 2015 and replacing him with Des van Rooyen. This decision was a defining moment of Zuma’s administration as it wiped at least R170 billion off the stock market and plunged the rand to lows of R15.38/$.
Last year two ratings agencies downgraded the economy to junk status, for among other things, political uncertainty.
Meanwhile, the International Monetary Fund revised SA’s growth prospects for 2018 and 2019 down to 0.9 percent for each year, after the previous forecasts of 1.1 percent for 2018 and 1.6 percent for 2019.
With Zuma’s resignation on Wednesday, the rand roared to R11.66/$ - its strongest against the greenback since 2015.
December 2015 - In his administration defining moment, Zuma fires Finance Minister Nhlanhla Nene and replaces him backbencher Des van Rooyen. The rand falls 5 percent to its lowest level yet, hitting R15.38 against the dollar - it is down 30 percent since the beginning of the year. The stock market wipes R170 billion. Pressure mounts on the decision and after four days, Van Rooyen is replaced by a Treasury old hand, Pravin Gordhan.
For a detailed timeline of Zuma’s controversial and scandal-riven reign as president of the republic, get a copy of Business Report tomorrow
- BUSINESS REPORT ONLINE