Nhlanhla Nene Makes Comeback as South African Finance Chief

Updated on
  • President Ramaphosa announces sweeping changes to cabinet
  • Pravin Gordhan named as minister in charge of state companies

South Africa’s new president, Cyril Ramaphosa, made sweeping changes to the cabinet, bringing Nhlanhla Nene back as finance minister more than two years after his late-night firing rocked the rand.

The reshuffle announced Monday by Ramaphosa in the capital, Pretoria, marked a dramatic comeback for Nene, who was dismissed by former President Jacob Zuma in December 2015. David Mabuza, the deputy leader of the African National Congress, will become deputy president.

Nhlanhla Nene

Photographer: Waldo Swiegers/Bloomberg

The shakeup came 11 days after Ramaphosa was elected president in place of Zuma, who was forced to resign under pressure from the ANC.

“These changes are intended to ensure that national government is better equipped to implement the mandate of this administration,” Ramaphosa said. “I have been conscious of the need to balance continuity and stability with the need for renewal, economic recovery and accelerated transformation.”

Nene served as deputy finance minister before taking over the post of finance chief from Pravin Gordhan in 2014 and won the respect of investors before his firing. Since then he’s taken up a position on the board of fund manager Allan Gray, become an adviser to Thebe Investment and served as temporary head of the University of Witwatersrand’s Business School.

Nene will spearhead efforts to revive an economy that only grew about 1 percent last year, drive down a 27 percent unemployment rate and rebuild investor confidence that was badly damaged during Zuma’s scandal-marred nine-year tenure.

“It’s quite a tall order,” Nene said by phone after the announcement. “I feel it’s time we all rolled up our sleeves, and I trust that the collective is going to give one the required support.”

The rand gained as much as 0.8 percent against the dollar on reports Nene was to be appointed, before trimming its advance. It was little changed at 11.5670 per dollar by 9:50 a.m. in Johannesburg on Tuesday. Yields on rand government bonds due in 2026 rose one basis point to 8.03 percent.

‘The Cat’

While Nene’s appointment, replacing Malusi Gigaba, is likely to be widely welcomed, concerns may be raised about Mabuza getting the second-most senior government post. The former premier of the eastern Mpumalanga province, he’s been accused of helping to rig state tenders and having his opponents silenced -- accusations he’s denied.

David Mabuza

Photographer: Waldo Swiegers/Bloomberg

Mabuza, a former schoolteacher widely known by his initials DD and who calls himself “the cat” because of his political survival skills, emerged as a power broker in the ANC by signing up tens of thousands of new members in Mpumalanga where he is the party’s chairman.

He led the second-largest voting bloc of delegates to the ANC’s national elective conference in December and persuaded most of them to back Ramaphosa over Nkosazana Dlamini-Zuma, Zuma’s ex-wife and favored successor.

“The reappointment of Nhlanhla Nene is a positive step in rebuilding South Africa’s fiscal credibility,” said Andrew Canter, chief investment officer at Futuregrowth Asset Management, Africa’s biggest specialist fixed-income money manager. “South Africa’s renewal lies in the ability to get economic growth and opportunity back on track.”

Nene’s deputy is Mondli Gungubele, a lawmaker and former mayor of the Ekurhuleni municipality who was a fierce critic of graft during Zuma’s tenure.

Gordhan was named as minister of public enterprises and will be responsible for overseeing six of the biggest state-owned companies. Gigaba returned to his former post of minister of home affairs, while Lindiwe Sisulu will become foreign minister.

Gwede Mantashe

Photographer: Waldo Swiegers/Bloomberg

Gwede Mantashe, the ANC’s chairman and former head of the National Union of Mineworkers, was named mineral resources minister in place of Mosebenzi Zwane, while Jeff Radebe, previously a minister in the presidency, becomes energy minister in place of David Mahlobo. Zwane and Mahlobo, who were close Zuma allies, were dropped from the cabinet.

Market Friendly

Bathabile Dlamini, whose tenure as social development minister was marred by a scandal over the payment of welfare grants, will become a minister in the presidency with responsibility for women’s affairs.

“The new cabinet shows that Ramaphosa is willing to make market friendly appointments such as Nene to finance and Gordhan to public enterprises,” Daniel Silke, the director of Political Futures Consultancy in Cape Town, said by phone. “However, the appointment of DD Mabuza as deputy president and the retention of Bathabile Dlamini, although in a different position, shows that he is unable to shrug off the internal ANC politics of the Zuma era.”

— With assistance by Amogelang Mbatha

    Before it's here, it's on the Bloomberg Terminal.