Africa Economy: S. African President Zuma pledges to continue prudent fiscal policy

The South African government will not abandon the fiscal path that it has chosen in the last few years, President Jacob Zuma said on Friday.

"Maintaining a prudent fiscal position remains one of government's top priorities," Zuma said in an apparent bid to ease market jitters following the removal of Finance Minister.

Zuma sacked Nene on Wednesday evening and appointed David van Rooyen to take over his position.

No reason was given for the removal of Nene.

Responding to the news, the South African rand has continued to slide dramatically against major currencies.

The rand plummeted to record lows of R16 to the U.S. dollar on Friday.

The move has also seen banking shares drop by more than 10 percent to levels last seen after the 2008 global financial crash.

There have been growing calls for Zuma to explain why he sacked Nene and whether Nene's removal means a policy change.

Responding to the calls, Zuma said Van Rooyen's appointment as Minister of Finance "does not signal a change in the government's fiscal stance".

The new minister will strengthen the path and continue to support all efforts aimed at improving the lives of ordinary South Africans, said Zuma.

The government remains committed to adhering to the set expenditure ceiling while maintaining a stable trajectory of the country's debt portfolio, as set out in the February 2015 Budget, said Zuma.

Van Rooyen is supported by Deputy Minister Mcebisi Jonas who carries many years of experience in the economic cluster, according to Zuma.

"They are supported by the hard-working and capable National Treasury team, led by the Director-General, Mr Lungisa Fuzile," Zuma said.

Zuma thanked Nene for his sterling contribution to the National Executive and to taking forward the goals of building a better life for all South Africans.

"The urgency of the changes in the leadership of the National Treasury was occasioned by the need to send nominations to Shanghai, of the head of the African Regional Centre of the New Development Bank/BRICS Bank, to be based in Johannesburg. Mr Nene is our candidate for this position," said Zuma.

"We are fully backing his candidature, knowing full well that he will excel and make the nation proud in his next assignment," Zuma said.

He said the government's commitment to diversifying the economy, reducing the cost of doing business and utilizing resources much more efficiently to enable a more inclusive economic growth remains important.

"We will continue to improve the budget process in order to maintain our international reputation as a global leader in budget transparency," Zuma said.

He said South Africa continually seeks to enhance the expansive information it provides to its citizens on how public resources are generated and used with the aim of improving budget participation.

To support the economy, the government is committed to sustaining public sector capital investment, by attracting private sector capital into public infrastructure projects, the president said.

The government also remains committed to providing support to State Owned Companies in a fiscally sustainable manner, including South African Airways, Zuma said.

"We assure the nation that nothing will be done, in supporting state owned entities, that runs contrary to the fiscal prudence that our country is renowned for," he said.

However, Zuma said, no state-owned entity will dictate to the government how it should be assisted.

Zuma pledged to continue improving the budget process in order to maintain the country's international reputation as a global leader in budget transparency. Endit