South Africa’s new finance minister Pravin Gordhan vowed on Monday to stabilise the tottering economy after his predecessor lasted just four days in the job amid a dramatic slump in the rand.
“We will stay the course of sound fiscal management,” Gordhan told reporters. “Our expenditure ceiling is sacrosanct. We can have extra expenditure only if we raise extra revenue.”
President Jacob Zuma last week ousted respected finance minister Nhlanhla Nene in favour of the little-known David van Rooyen, triggering a backlash that led to a U-turn on Sunday when Rooyen himself was removed.
“The facts about the developments that took place last week and the response of the financial markets are well-known,” said Gordhan, who is of Indian-origin.
“Our currency fell, the stock market dropped by 2.94% and bond yields shot up by over 150 basis points.
“Our government is acutely aware of the financial impact this had on those who are invested in this economy.”
Zuma was accused of sacking Nene partly because the minister had publicly slapped down a move by state-owned South African Airways (SAA) to renegotiate a plane-leasing deal with Airbus.