JOHANNESBURG – Nhlanhla Nene's shock axing as finance minister last week may have damaged the country's economy in the long run, according to the Johannesburg Stock Exchange.
Capital markets suffered major losses following Thursday's announcement that Nene had been replaced by David van Rooyen as finance minister.
Johannesburg Stock Exchange boss Nicky Newton-King says she's concerned the economy will be troubled for some time because of President Jacob Zuma's decision.
In a statement, she says more than R169-billion was lost on the equities market in the two days following the announcement.
The JSE’s Financial Index dropped by more than 13 percent.
The Banks Index also took a heavy knock, falling by a massive 18.54 percent.
By end of day on Friday, both the All Share Index and the Top 40 Index were limping.
Newton-King warns the market losses will place a strain on credit extension and interest rates in the long run.
Fuel and food prices are likely to rise as a result, and debtors will end up paying higher interest on loans and bonds.
Pension funds and other investment holdings have also suffered significant losses.
Newton-King says local business is in for a rough ride, if the rand continues its decline.
Zuma on Sunday responded to the outcry over Nene's axing by reinstating Pravin Gordhan to the finance ministry.