South Africa’s new President, Cyril Ramaphosa, seems to have a lot going for him. His early new broom sweeps clean gestures have been incisive and the market indicators are responding well. A plethora of good news has come his way in the weeks since he was sworn in.
The rand has remained strong, and with it the steadying of the inflation rate – at 4% the lowest it’s been in three years. This in turn allowed the South African Reserve Bank to cut interest rates by 25 basis points. Few things benefit a feel good effect better than downward movement in interest rates.
And business confidence is looking up. This could mean that companies use their high cash balances to invest.
Most critically, global credit rating agency Moody’s maintained South Africa’s investment grade rating and upgraded the outlook of the country’s sovereign debt to stable. And while one of the other top three rating agencies, S&P, didn’t upgrade its sub-investment grading, it doubled its growth forecast for 2018 from 1% to 2%.
Also auspicious is the trajectory of the global economy, if Trump’s trade war can be contained. The prospect of continued economic growth across Africa and the huge improvement in the southern African environment with new leaders in Zimbabwe, Angola, Mozambique and South Africa, are also positive.
But Ramaphosa will have to do much more to rekindle growth, address deep inequalities and tackle corruption in the private and public sectors. Above all he must address policy uncertainty. This is affecting a range of key sectors from energy to telecoms, water mining and land.
The Ramaphosa government can’t do everything at once. There are seven key areas that South African’s new president should focus on to make some headway.
Article courtesy of MONEYWEB – Read the full article and TO DO list HERE