May bad politics and a weak rand be things of the past in 2019

What comes next year? After years of anxiety over SA’s future, this question shouldn’t hold as much worry as it did in the past. While the economy is some miles off growth rates above 3%, which we should have been pushing were it not for our bad politics of the past decade, there is a very real prospect that US growth may cool next year. Perhaps it’s a bit odd for me to be hoping to see the world’s largest economy’s growth ease, but its bullishness over the past decade — especially the past five years — has been rather damaging for emerging-market nations such as ours. A strong US economy has fed into tighter monetary policy in that country and, in turn, a strong dollar.

That dollar and, admittedly, the bad politics we’ve seen throughout emerging markets have battered those markets’ prospects.

Assured by US economic recovery after the 2008 global recession, the Federal Reserve System first increased rates in December 2015 after slashing them to near zero to support that recovery. Since that first strike, the rand has weakened some 24% against the dollar.

Now, sentiment is changing against Trump’s country. There are questions about his trade policy but, in truth, it is unnatural that the US economy has expanded as much as it has for as long as it has. There’s an expectation that, by natural cycles, a cooling-off is long overdue.

Should growth cool, the Fed will speak with more dovish tones with regard to rates, and, in turn, the dollar will likely weaken, providing some relief for emerging-market currencies. So here’s hoping US growth does cool and the country’s Fed eases up on raising rates.

A stronger rand, lower inflation and an increase in domestic consumption would be a handy boost to growth prospects and would prove an ideal tonic for business and consumer confidence. That’s my hope for the most important exogenous factor for SA, a break from the past five years.

Now to what we control: steering a path away from the bad politics of the past decade, a period marked by a rise in populism and, in latter years, the politics of patronage modelled on Russia’s “experiment” with democracy. Our politics are still bad, but if you consider where we were last December, our state is at least better. Jacob Zuma’s presidency was disastrous — its end in February was the most important development this year.

Imagine an alternative universe where he is still in charge, and laying the groundwork for his anointed successor next May. Now that’s a depressing prospect. The possible change in global monetary policy led by the US Federal Reserve would have been yet another opportunity missed.

So Cyril Ramaphosa’s presidency is a chance for our politics to be refashioned, just in time to get the country in a better position to benefit from a possible shift in sentiment towards emerging markets.

Given his slim margin of victory, we all wondered just how brave he would be in clearing the rot. The political minefield the new chiefs of Luthuli House have had to navigate meant the changes weren’t as swift as an impatient public would have liked. Still, there have been changes — more than 11 ministers have lost their jobs, and boards across the most troubled state-owned enterprises have been changed.

The appointment of a National Prosecuting Authority head and the manner in which it was done were a further step in the right direction in boosting confidence levels in the state itself.

What has been most impressive is that Ramaphosa has overseen changes through legal processes, and, try as they might, men such as Tom Moyane haven’t been able to build a strong enough fightback campaign.

Should this focus continue into the new year without fear of how it will affect the ANC’s poll performance, we could see our bad politics grab fewer headlines and, in turn, confidence levels rise.

Zuma’s exit was the most important development this year