16 May 2019

South Africa: Goldman Sachs' Big, Big Bet On South Africa

analysis

As if Goldman Sachs' very public pre-election support for the ANC was not enough, the firm hosted an investment conference on Wednesday that was headlined by President Cyril Ramaphosa and attended by public enterprises minister Pravin Gordhan, investors and SA industry. While the close relationship between government and the investment bank may be music to the ears of business, the timing of the conference looks designed to curry favour -- and eyebrows are being raised.

US investment banking firm Goldman Sachs bet in 2017 that Cyril Ramaphosa would emerge the victor at the ANC's elective conference and that - following his ascendancy to the Presidency - he would implement market-friendly reforms that would drive economic growth in South Africa.

With this in mind, the investment bank applied for a South African banking licence which would allow it to become a more active participant in the country's foreign exchange and capital markets, including other things (it won't take retail deposits, however).

Ramaphosa made reference to this in his 2018 State of the Nation address.

"Business confidence among South African companies has improved and foreign investors are looking anew at opportunities in our country. Some financial institutions have identified South Africa as...

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