From bad to worse for South Africa?

Last year was not a good one for South Africa. And this year isn’t shaping up to be much better, either.

Andrew Van Sickle
By
published

Last year was not a good one for South Africa. The economy barely grew, which is especially bad news in a country with an official unemployment rate of 27%. The scandal-prone president, Jacob Zuma, and his cronies kept trying to edge out finance minister Pravin Gordhan, who is trying to contain government spending and mismanagement at state-owned companies. South Africa narrowly avoided being downgraded to junk by credit-ratings agencies, and Zuma had to fend off a bid to oust him by his ruling ANC party. New anti-money-laundering laws have been delayed, adding to a damaging sense of drift. It's no wonder the rand hit record lows against the dollar last year.

This year isn't shaping up to be much better. Much of it will be taken up with a leadership struggle in the ANC. Whoever wins the vote in December will lead the party, the popularity of which is rapidly dwindling, into the 2019 national election. One candidate is likely to be Cyril Ramaphosa, a former leader of the miners' union who missed out on becoming Nelson Mandela's successor in 1999.

He became a billionaire when he left politics, and his experience "has encouraged investors", says Joseph Coterill in the Financial Times. The trouble is that his time away from politics "may have left him outside the complex power blocs of today's ANC". And Zuma's ex-wife Nkosazana Dlamini-Zuma, the other prospective candidate, is much closer to the increasingly powerful provincial chiefs and their networks of patronage. The upshot is that corruption and cronyism could well continue to flourish under her leadership, and the economy would drift further towards the rocks.

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Andrew Van Sickle
Andrew Van Sickle

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.

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