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SOUTH AFRICA has had three finance ministers in less than a week. The first, Nhlanhla Nene, a respected technocrat, was “redeployed” after he objected to wild spending plans. One clash involved the chairman of South African Airways, Dudu Myeni, who wanted the state carrier to buy aeroplanes via an unnamed middleman. Local press speculated that Ms Myeni was one of the president’s mistresses. Jacob Zuma issued a public denial. He replaced Mr Nene with a nonentity: a backbench MP and former small-town mayor called David van Rooyen. The rand promptly plummeted 9%. Over the weekend Mr Zuma dropped Mr van Rooyen and replaced him with Pravin Gordhan, a safe pair of hands who has done the job before. Problem solved? Not by a long shot.
Since Mr Zuma came to power in 2009, South Africa’s finances have grown ever more precarious. The budget deficit is 3.8% of GDP. Public debt has ballooned from 26% to almost 50%. This month Fitch, a credit-rating agency, downgraded the country’s debt to a notch above junk. Many analysts expect another downgrade in 2016. That could be disastrous (see article). Many of the funds that hold South African debt are barred from owning junk. If South Africa is downgraded again, investors will rush to dump its paper. The country’s interest bill will soar, crowding out other public spending. Mr Zuma seems only dimly aware of the danger. In a speech after he sacked Mr Nene, he praised Robert Mugabe, Zimbabwe’s despot, boasted that Africa is the biggest continent in the world (it is not) and failed to mention the small matter of his country’s credit rating.
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