Cape Town - President Cyril Ramaphosa on Tuesday named former Reserve Bank governor Tito Mboweni as his new finance minister, reassuring markets after a jittery week in which Nhlanhla Nene's integrity came into question as the probe into the state capture scandal unfolds.
Nene fell on his sword in a letter to the president on Tuesday, after confessing that he had met repeatedly with the Gupta family who are at the centre of the scandal that came to define the presidency of Jacob Zuma and cost the country billions.
In Mboweni, he chose a treasury head with a market-friendly reputation who headed the SA Reserve Bank for ten years and introduced the policy of inflation targeting.
Mboweni was appointed governor of the central bank in 1999 and held the post for ten years and Ramaphosa said he believed he would prove invaluable to his administration as it seeks to create jobs.
After he was sworn in as finance minister at Tuynhuis in Cape Town, Ramaphosa shook his hand and quipped: "You can now get ready for your first Cabinet meeting tomorrow (Wednesday) morning."
As Mboweni was leaving Tuynhuis, Mboweni declined all comment on the economy and his policy priorities, jokingly telling reporters: "The president has taken my freedom away."
Asked when he was informed of his appointment, Mbowni said he received a call just after 9pm on Monday night.
Ramaphosa has been under pressure to act against Nene since last week when he admitted before the Zondo inquiry into state capture scandal that he had met with the Gupta family half a dozen times at their Johannesburg home and business premises between 2009 and 2014, but denied helping to further their interests. In 2016, he had said in a media interview that he had only ever encountered members of the family by chance.
Much of that pressure came from the far-left Economic Freedom Fighters, who on Tuesday welcomed the news that Ramaphosa had accepted Nene's resignation, but said his failure to axe the likes of Home Affairs Minister Malusi Gigaba, who is fending off allegations that he sped up the naturalisation of the Indian-born Guptas, left him looking inconsistent.
According to Ramaphosa, Nene offered to quit for fear that the revelations would have a negative impact on the country and his ability to do his job.
Ramaphosa said it was a measure of Nene's integrity that he had done so in the belief that the revelations would prove a distraction to a vital task.
He then thanked him for his service, and stressed that he had not been found guilty of any wrongdoing, but hastened to add that he was adamant the commission should expose the full of extent of wrongdoing in scandal that continues to haunt Gigaba, among others.
Ironically, Nene was fired by Zuma for obstructing his controversial plans to procure more nuclear power plants.
Steven Nathan, chief executive officer of 10X Investments, said the announcement was good news because it showed the new leadership was serious about making a clean break with the past.
Nathan said that the announcement was evidence of "a dramatic departure from the previous Zuma-led government, where even when there was ample evidence of corruption or inappropriate behaviour nothing seemed to happen".
"This is very positive for South Africa because it shows how serious the new government under Cyril Ramaphosa is about dealing with corruption and even the perception of corruption and dishonesty," said Nathan, who was a leading analyst before he founded 10X, a disruptive asset manager.
"The message is clear that the lack of integrity, the lack of accountability and the complete disregard for honesty and ethical behaviour that dominated South Africa for so long is not going to be tolerated."
Nathan added that Ramaphosa’s announcement sent a strong message to other government departments, to parastatals and even to the private sector that “the moral fibre of this country will rise”.
Chris Eddy, a senior investment analyst at 10X Investments, said the news of change of guard at National Treasury could be viewed as positive.
"Nhlanhla Nene has been replaced as Finance Minister by Tito Mboweni, who the markets have a lot of faith in," Eddy said.
"Through his long tenure as Reserve Bank governor, Mboweni presided over a period of relatively consistent and stable monetary policy and I think the markets would be relatively confident with him at the helm of the South African Treasury."
* Read more on #TitoMboweni
.