Written by Andrew Beatty | From AFP

South African President Jacob Zuma on Sunday tapped junior minister Nhlanhla Nene to become the country’s first black finance minister as he unveiled his new cabinet a day after taking office.

The appointment of Nene, aged 55, represents a statement of intent from Zuma, who has vowed to bring radical social and economic transformation in his second five-year term.

Within South Africa’s ruling ANC there is a strong desire to put more economic power in black hands.

In the 20 years since South Africa struggled free from racist apartheid rule, the economy remains predominantly in white hands, despite a raft of empowerment programmes.

“Economic transformation will take centre-stage during this new term of government as we put the economy on an inclusive growth path,” Zuma said at his inauguration Saturday (Shenzhen:002291.SZ – news) .

Nene had served as deputy to internationally respected finance chief Pravin Gordhan, who is of Indian origin.

“Nene is an old-hand at the treasury,” said Razia Khan, Africa’s regional head of research for Standard Chartered Bank. “He will be seen to represent policy continuity.”

But his appointment is not without risk. He follows on from Gordhan and the similarly well-regarded Trevor Manuel — who is mixed race — and perhaps faces a tougher challenge than either of his predecessors.

The rand has been under pressure for months and ratings agencies have warned that deficits, high unemployment and slow growth may prompt a further credit downgrade to junk bond status.

That could raise the cost of borrowing for the South African government and prompt international investors to look to other faster-growing emerging markets in Africa.

Some analysts also believe the country will report negative growth in the first quarter later this week.

“Progress made in lifting growth, and fulfilling previous fiscal consolidation pledges, will be closely watched,” said Khan.

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