Gigaba new finance minister & the sky will not fall in

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Minister Malusi Gigaba is the new finance minister bringing to an end the long speculation that former Finance Minister Pravin Gordhan was facing the axe.

Like those before him, the Rand has begun to tumble at the announcement of Gigaba’s new post.

When Trevor Manuel was appointed the first ANC finance minister in March 1996, the Rand rapidly depreciated as investors thought (and wrongly so) that it was a move towards a “less disciplined management of the economy”.

Writing of Manuel in the Guardian, Hugo Young, in an interview with former President Thabo Mbeki writes: “Trevor Manuel is the first black finance minister, and early in his time in office he said something that the markets took as seriously as they might a few words from Alan Greenspan, chairman of the US federal reserve. Mr Manuel described markets as ‘amorphous’. This followed some ruminations by the president himself, which had passed without comment, suggesting that markets were not magical,but capable of being affected by human decisions”.

“‘Amorphous” was too big a word for the brokers. ‘Big panic, lots of trouble, rand depreciating’ Mbeki recalled.”

The Mail & Guardian in 1997, writing on Manuel’s first budget speech in Parliament wrote: “So the first black finance minister presented his first Budget and the sky didn’t not fall in”.

Brian Kantor, writing of the now “much respected Manuel” in “Trevor Manuel and the Markets” writes: “The behaviour of the currency market can only be regarded as particularly hostile to the growth and stability of SA economy over the Manuel years. The real value of the rand has declined by 14% over the same period…..Moreover, the real exchange rate has been especially volatile over the period….”

The behaviour of the currency market can only be regarded as particularly hostile to the growth and stability of the SA economy over the Manuel years. The real value of the rand has declined by 14 percent over the same period. That is, the rand fell significantly more than would have been justified by declining differences between SA inflation and the average inflation rate of our trading partners. Moreover, the real exchange rate has been especially volatile over the period – thus adding to the risks of doing business in SA. These outcomes in the currency market can only be regarded as unsatisfactory for the real economy and its progress.

The behaviour of the currency market can only be regarded as particularly hostile to the growth and stability of the SA economy over the Manuel years. The real value of the rand has declined by 14 percent over the same period. That is, the rand fell significantly more than would have been justified by declining differences between SA inflation and the average inflation rate of our trading partners. Moreover, the real exchange rate has been especially volatile over the period – thus adding to the risks of doing business in SA. These outcomes in the currency market can only be regarded as unsatisfactory for the real economy and its progress.

When Tito Mboweni was appointed governor of the reserve bank in 1999, taking over from apartheid’s governor Chris Stalls,  the bank tumbled and recovered.

 

 

7 Comments on "Gigaba new finance minister & the sky will not fall in"

  1. Jeff Koorbanally | March 31, 2017 at 8:02 am | Reply

    31 March 2017 will go down in the history of our Liberation on Radical Transformation.

    Our Lord came at the late hour & finally delivered us from the Evil!

    Today a solid foundation has been laid. The choice of bringing young leadership is highly commended.

    The Choice of Gigaba to take over Finance Ministry being assisted by Buthelezi as his Deputy, is indeed an excellent choice.

    The Public of this country need to give these two brilliant young intellectuals an opportunity to prove their high value that they will bring to the leadership of this country, which is in the best interest of the poor. Yes they will come across lots of resilience from the WMC to try to discredit them, but they are not here to please WMC but to fulfill their mandate to the people that put them there!

    The stand behind the Hon President Bold & Courage decision to bring this Radical Changes to the Administration.
    We further stand behind the young leadership deployed.

    We say “the Sky is the limit” Viva to the young lions!

    Mbalula will excel in that Portfolio, remember he was deputy to this ministry, he acts without fear or favor, that’s what we need in the Security Cluster to curb crime and corruption & third force interference.

  2. Dont worry the markets will sober up to the reality of a brave President. One who doesnt consult them when he appoints head of Treasury. This is the year of radical economic transformation.

  3. Jannie vd Merwe | March 31, 2017 at 12:20 pm | Reply

    Free at last, Free at last, Thank God Almighty we are free from Gordhan at Last. Viva Gigaba, Pumbile Buthelezi. Halala Msholozi.

  4. Vyri Lennon Seherie | April 1, 2017 at 12:56 pm | Reply

    How the mighty has fallen…

    Radical economical transformation will take centre stage at last. The president showed good leadership with the handling of cabinet reshuffle. Even during this time of mud throwing and name calling, he show a new found maturity… The economy will be accessible by the black majority and the three evils can be address namely unemployment, unequality and poverty.

  5. Free at last to plunder the treasury thru fake nuclear contracts.
    Free at last to do do your masters (the Guptas) bidding.
    Free at last to trash the SA economy to the usual african (junk status) level.

    • Pinky Khoabane | April 12, 2017 at 7:00 am | Reply

      The European economists say the country is financially sound. Junk status is not reserved for AFrican countries only. Lo Read widely and educate yourself. The President will employ whomever he likes. If you don’t like it, you can go back to where you come from.

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