14 March 2019

Africa: A Look At What Might Happen If South Africa Is 'Junked' in Two Weeks' Time

analysis

'Ramaphoria' may be present in politics, but with South Africa's business confidence falling on Wednesday to rock-bottom lows, it's becoming clear that the idea is not gripping the economy, posing an increasingly pressing question: What will happen if South Africa is 'junked' at the end of March?

The ANC's support in the election campaign appears to be holding, and according to opinion polls, President Cyril Ramaphosa's popularity is soaring. The leadership of a business-adept president along with investment and jobs summits was supposed to have a catalytic effect of the economy.

Yet the economy is proving to be a stubborn beast, and that was graphically demonstrated on Wednesday when business confidence fell to the lowest level in almost two years in the first quarter, Rand Merchant Bank and Stellenbosch's Bureau for Economic Research announced. Extraordinarily, more than two-thirds of respondents were dissatisfied with present conditions.

When Ramaphosa was elected ANC leader in 2017 and South African President in 2018, business confidence soared from lows during the politically chaotic times when then President Jacob Zuma was firing Cabinet ministers. But it has dropped steadily since then, dropping every single quarter, and it's now back to Zuma-era lows.

The significance is that...

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