File picture: Itumeleng English/African News Agency (ANA)

Johannesburg - National Treasury director-general Dondo Mogajane told the Zondo commission that the country has not fully recovered from the impact of Nhlanhla Nene's firing as finance minister in December 2015. 

Nene was fired on December 9, 2015, and his removal sent the markets on a tailspin with questions surrounding why he was removed. 

He was replaced with little know ANC backbencher Des van Rooyen, who lasted four days in the position before former president Jacob Zuma was forced to bring back Pravin Gordhan as the minister of finance to "calm the markets". 

Mogajane gave a detailed testimony on Friday at the commission explaining the impact of Nene's removal and how it lasted longer than four days. 

He said it was unlikely that the Johannesburg Stock Exchange (JSE) recovered from the massive hit it took through market capitalisation.

"There was a catastrophic fall of the rand at the time. The impact was that we saw about 148 000 jobs being lost in terms of the model that we ran, we saw a reduction of about R378 billion in JSE market capitalisation and we also saw an impact of at least 1.1% cost on the GDP  by the end of the year 2017," said Mogajane. 

Mogajane's calculations were based on a model Treasury compiled to try and measure the impact of Nene's removal and its effect on the economy.

"We nominated the period from the announcement of Nene's exit from the system until the replacement before the Asian markets opened that Sunday. That was the period, but the impact would have carried through costs and it would have been felt throughout and lasted much longer," he said. 

He said the impact of the depreciated rand and knock on the markets could likely still be felt today. 

"In terms of the impact that we saw, one can say it is the impact that we saw much later, that we feel right now. I do not think we were able to ever recover in the way that we had lost market capitalisation of about 370 billion. The JSE has never recovered that," said Mogajane. 

Business confidence was also on an all-time low, which required that Gordhan and National Treasury embark on an extensive investor drive to convince investors that South Africa was still in business. 

"Business confidence was at its lowest as we approached January of that year (2016) and that's why minister Gordhan indicated that there was clearly a need to rally around various sectors of the country. By March we had a plan to do something about it. That's why we went on an extensive road show to show investors that SA was still open for business," said Mogajane. 

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