Treasury economist MacLoad says Nene's axing as finance minister was devastating

Catherine MacLeod said because Treasury attempted to stop projects that were fiscally unsustainable, investors became concerned.

A screengrab of Treasury economist Catherine MacLeod being sworn in at the Zondo commission of inquiry into state capture.

JOHANNESBURG - Treasury economist Catherine MacLeod has described the devastating impact Nhlanhla Nene's axing had on the economy in 2015.

MacLeod took the stand at the state capture commission on Tuesday, where she corroborated the testimony of director-general Dondo Mogajane.

Nene was fired by then-President Jacob Zuma and replaced by Des van Rooyan, in a move that sent the markets into a tailspin.

It forced Zuma to reappoint Pravin Gordhan to the finance ministry.

MacLeod said the situation was dire: “We saw the rand, which was previously R14.59 to the dollar on 9 December, going to R15.27 on 10 December and reaching R15.90 on 11 December.”

WATCH: Treasury's Catherine MacLeod gives evidence at Zondo Commission

MacLeod said because Treasury attempted to stop projects that were fiscally unsustainable, investors became concerned by the removal of finance ministers who were seen to be credible.

"They were concerned that the change in ministers would weaken the National Treasury’s ability to fight those policies within the Cabinet."

She said political uncertainty affected investments.

“To the extent that a change in ministers means that the government may borrow more and it changes investor’s perceptions of how able the government will be in paying back debt.”

(Edited by Mihlali Ntsabo)