In a rare move, dozens of academics from the country’s universities have written an open letter criticising President Jacob Zuma’s decision to fire his Finance Minister Nhlanhla Nene. The letter was published in Business Day, South Africa’s leading business newspaper. We republish the letter here.
We the undersigned, academics in economics and related disciplines at South African universities, while not necessarily agreeing on all aspects of economic policy, are shocked and disturbed by the decision of President Zuma to remove Nhlanhla Nene as Minister of Finance.
This concern is not only about Mr Nene. It is also about the sudden way in which the change occurred. It seems that the president failed to understand or ignored the seriousness of the context and inevitable negative consequences for the economy and all citizens of South Africa.
We accept that finance ministers in other countries, both developed and developing, have been removed from office and have no special protection. However, in the context of the interconnected global economy and highly fragile global and national economy we find ourselves in, such decisions, we would argue, cannot be made lightly or capriciously. Neither can they be made without adequate and well communicated reasons that can be understood unambiguously by citizens, the markets and all relevant stakeholders.
We would expect, in conditions which include slow growth, high unemployment, growing income inequality, a troubling fiscal outlook, and a recent credit rating downgrade to just above junk status, that any replacement minister would immediately be able to command the respect of all stakeholders. We would expect that she or he would have the stature, calibre, record, and experience to continue to carry out the policy mandate of government, and command the respect of all South Africans, the markets and stakeholders. In our judgement none of these considerations were taken into account.
As minister of finance, Mr Nene has shown that he has not only a clear understanding of the many economic and financial crises facing South Africa, but also a clear and detailed plan to avoid the major risks we currently face. It should therefore not be surprising that the field has been left open to speculation of all kinds.
The timing of the announcement of Mr Nene’s removal is most unfortunate, with the country on the verge of a further credit rating downgrade by rating agencies. Mr Nene was widely respected and brought stability to the National Treasury. Economic institutions such as the National Treasury, the South African Reserve Bank, Statistics South Africa and the South African Revenue Service have been indispensable and essential bulwarks during the continuing global economic crisis. Current threats to the effective functioning of such institutions undermines the national interest.
Removing Mr Nene gives the impression that President Zuma does not care about the impact of the withdrawal of investment that we are currently experiencing, the rising cost of borrowing, the instability of our currency, the growing inequality, and rising inflation. Or he doesn’t understand that in the current context of 0.7% growth and a serious drought, this action imposes huge risks to the living circumstances of poor South Africans and to the stability of the country. Or, more ominously, the possibility that the president simply did not consider the impacts of his decision to remove Mr Nene could explain the panic and speculation which has ensued.
As academics in economics and related disciplines we express our unambiguous and urgent concern both about this event, and about the general lack of progress in tackling the massive and growing crisis of low growth, poverty unemployment and inequality.
Collectively supported by:
University of Cape Town:
Prof Cally Ardington, Prof Haroon Bhorat, Prof Anthony Black, Prof Justine Burns, Prof John Paul Dunne, Prof Lawrence Edwards, Prof Alan Hirsch, Prof Faizel Ismail, Prof Evance Kalula, Prof David Kaplan, Prof Malcol Keswell Prof Murray Leibbrandt, Prof Tony Leiman, Prof Brian Levy Prof Mike Morris, Prof Edwin Muchapondwa, Prof Efi Nikolaidou Prof Vimal Ranchhod, Prof Don Ross, Prof Hana Ross, Prof Mills Soko, Prof Corne van Walbeek, Prof Francis Wilson, Prof Martine Visser, Prof Martin Wittenberg, Prof Ingrid Woolard, Dr Nicola Branson, Dr Lea Esterhuizen, Dr Dambala Gelo, Dr Co-Pierre Georg, Dr Kevin Kotze, Dr Cecil Mlatsheni, Dr Jane Turpie, Mrs Katherine Eyal, Mrs Leigh Neethling, Mr Morne Oosthuizen, Mr Christopher Rooney, Mr Grant Smith, Mr Benjamin Stanwix, Ms Caroline Skinner.
University of Free State
Prof Philippe Burger, Prof Frikke Booysen
University of Johannesburg
Prof Samatha Ashman, Prof Simon Roberts, Prof Fiona Tregenna.
University of KwaZulu-Natal
Prof Dori Posel, Prof Francie Lund, Dr Claire Vermaak, Ms Cathy Sutherland.
University of Pretoria
Prof Riel Franzsen, Prof Johann Kirsten, Prof Steve Koch, Prof Elsabe Loots, Prof Jan van Heerden, Prof Niek Schoeman, Prof Renee van Eyden, Prof Nicola Viegi.
Prof Gavin Keeton, Prof Robert van Niekerk, Prof Larry Strelitz, Prof Lynette Steenveld, Dr John Reynolds.
University of Stellenbosch
Prof Wimpie Boshoff, Prof Ronelle Burger, Prof Rulof Burger, Prof Stan du Plessis, Prof Johan Fourie, Prof Rachel Jafta, Prof Ada Jansen, Prof Theo Kleynhans, Prof Andrie Schombee, Prof Ben Smit, Prof Servaas van der Berg, Dr Dieter von Fintel, Dr Marisa von Fintel, Dr Hylton Hollander, Dr Nicholas Spaull, Mrs Olvia Eziobi, Miss Carina Smit, Mr Le Roux Burrows, Ms Anja Smith, Mx Nwabisa Makaluza, Mr Eldridge Moses, Dr Chris van Wyk, Ms Pietie Horn, Mrs Liezl Nieuwoudt.
University of the Western Cape
Prof Ben Cousins, Prof Andries du Toit, Prof Ruth Hall, Prof Julian May, Prof Chris Tapscott, Prof John Williams.
University of the Witwatersrand
Prof Akin Akinkugbe, Prof Daniela Casale, Prof Jannie Rossouw, Prof Vishnu Padayachee, Prof Eric Schaling, Prof Imraan Valodia, Dr Prudence Magejo, Dr Gareth Roberts, Ms Lyndall Keeton, Ms Janine Dingley, Mr Lumkile Mondi.