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This file photo taken on February 25, 2015 shows South African Minister of Finance Nhlanhla Nene delivering the 2015 Budget Speech at the National Assembly in Cape Town.

RODGER BOSCH/AFP/Getty Images

South African President Jacob Zuma has shocked his country by firing his much-respected finance minister and replacing him with a little-known backbencher, sending the South African currency into a tailspin.

The dramatic move, announced in a terse statement with no explanation on Wednesday night, came as the South African economy has stagnated and the country's credit rating has fallen to nearly "junk" status.

The sacking of Finance Minister Nhlanhla Nene immediately led to a sharp drop in South Africa's currency, the rand, which hit a record low of 15.25 to the U.S. dollar within an hour of the announcement. It later recovered slightly, but remained down sharply from earlier in the day.

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The new finance minister, David van Rooyen, is an obscure Member of Parliament with no obvious expertise in finance. He was previously the mayor of a mining town near Johannesburg.

Reaction from economic analysts, both inside and outside South Africa, was universally negative. Mr. Nene had served as finance minister for barely 18 months and was often lauded for his work in curbing government spending and opposing wasteful deals.

The finance ministry is one of the few widely respected institutions in the South African government, praised for its prudence and integrity. The dismissal of its minister is seen as a deliberate scheme to place it directly under Mr. Zuma's thumb.

Analysts said the axing of Mr. Nene was linked to the finance ministry's resistance to Mr. Zuma's plans for a hugely expensive nuclear-energy deal, and its challenging of questionable deals at the state-owned airline, SAA, which is losing so much money that it is considered insolvent.

Some media commentators said the move could make it easier for Mr. Zuma and his cronies to "loot" the government in the final four years of his presidential term. One local newspaper, Business Day, said the new finance minister, Mr. van Rooyen, is considered "malleable."

The planned nuclear contract, potentially costing as much as $100-billion (U.S.), has been widely criticized as an insider deal under Mr. Zuma's direct control. The Russian government, which has forged close links to Mr. Zuma, is expected to win the contract to build as many as eight nuclear reactors in South Africa.

In his brief announcement at about 8 p.m. on Wednesday, Mr. Zuma gave no official clue for the sacking of his finance minister. "I have decided to remove Mr. Nhlanhla Nene as Minister of Finance, ahead of his deployment to another strategic position," the announcement said.

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"Mr. Nene has done well since his appointment as Minister of Finance during a difficult economic climate," it added. "Mr. Nene enjoys a lot of respect in the sector locally and abroad, having also served as a Deputy Minister of Finance previously."

Shortly after the announcement, Mr. Zuma gave a lengthy rambling speech to a dinner of African business leaders, but made no mention of his decision to dump his finance minister.

In his speech, Mr. Zuma called for the "liberation" of Africa, and urged African governments to use their political power to take control of "economic power."

For years, Mr. Zuma has been pledging to bring rapid economic growth and the creation of five million new jobs. But instead the economy has slumped, narrowly avoiding a recession this year. Mining strikes and electricity shortages have plagued the economy. The official unemployment rate has remained stuck at about 25 per cent, although it is closer to 40 per cent when discouraged job-seekers are included.

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