DURBAN – President Jacob Zuma has remained defiant, reportedly having refused to resign immediately as the country’s head of state, leaving the ANC’s National Executive Committee with little recourse but to recall him.
We take a look at some of Zuma’s decisions during his tenure as President and how the repercussions of which affected the econmy.
The firing of former Finance Minister Nhlanhla Nene
Nene was dismissed by Zuma in 2015.
South African economist Dr. Azar Jammine estimated that giving former Finance Minister Nhlanhla Nene the axe resulted in South Africa’s debt servicing rising between R1,5 billion and R2 billion.
PIC CEO Daniel Matjila said Nene’s firing also cost the Public Investment Corporation (PIC) R99 billion on the markets in the two days that followed.
Matjila also said that the Unemployment Insurance Fund lost R7 billion and the Compensation Fund lost R3 billion in the 48 hours after Nene was dismissed.
Read More: Nene’s axing cost PIC R99bn
The dismissal of former Finance Minister Pravin Gordhan
The firing of former Finance Minister Pravin Gordhan last year, according to the CEO Initiative, which comprises of business leaders had far reaching and disasterous consequences for the economy.
Gordhan’s exit shocked the markets and resulted in the rand falling to a two year low, this according to Jannie Rossouw, Head of the School of Economic & Business Sciences at the University of the Witwatersrand.
One of the most drastic consequences of the dismissal of Gordhan was a downgrade of South Africa’s credit rating by S&P Global Ratings.
It should be noted that when Gordhan left it also took away all the gains for 2017 and led to the biggest decline amongst over 140 currencies monitored by Bloomberg.
Peter Attard Montalto from Nomura told Biz News that Ghordan’s removal altered his GDP forecasts. His forecasted that the GDP would go from 1,1% to 0,2% in 2017 and in 2018 from 1,7% to 0,7%.
With the country’s GDP at around R350 billion, the drop on the economic growth reduction was interpreted into a loss of $7 billion over the two years.
Read More: Downgrade to cost economy dearly
The cost of the Nkandla Project seems to run well over the R246 million that stands in the Public Protector’s report, “Secure in Comfort”. This figure excludes lifetime costs, as the March 2014 report has found.
President Jacob Zuma’s home in KwaZulu-Natal Nkandla cost between R203 million to R238 million, according to a number of media reports. The City Press had reported that the President would only pay 5% of the R203 million cost.
Later on, it was reported that Nkandla would cost over R246 million according to a report by the then Public Protector Thuli Madonsela. Investigations by the Public Protector showed that the cost of the upgrades went from R27 million to R215 million.
According to an article by City Press described a report that showed that an important service delivery programme was set aside and the money was used to upgrade President Jacob Zuma’s homestead at Nkandla.
In December 2017. President Jacob Zuma was ordered by the North Gauteng High Court to personally pay the costs of his failed attempt to stop the release of the State of Capture report by former public protector Thuli Madonsela.
Read More: High cost of Nkandla exceeds R246m
South African Airways
President Jacob Zuma and his continued to bankroll embattled airline, South African Airways (SAA) has had a devastating effect on the economy.
Government over the last nine years has bailed out the state-owned airline drowning in debt. At the launch of the One Stop Shop in KwaZulu-Natal Zuma said, "that it was important to continue supporting institutions that strengthen our democracy and also our economy, as part of creating the right environment for economic growth and development."
The multiple bailouts that government has granted SAA has drained the fiscus, this according to a number of economists. The state airline lost R5,6 billion in the 2014/2015 financial year and lost R1.5 billion in the 2015/2016 financial year.
Last year SAA was handed a lifeline by the government when it approved the transfer of R3 billion to the airline a day before their Citibank debt deadline.
– BUSINESS REPORT ONLINE
Source: New feed