South Africa has until the 2019 Elections to Cash-in on Global Windfall
South Africa’s new President,
Cyril Ramaphosa must quickly show international investors his Government can implement reforms to take advantage of a weak dollar and growth in China, according to Citi’s head of emerging markets.
The rand, bonds and stocks have climbed to record highs due to what analysts have dubbed the “Ramaphosa rally”, a buoyant market mood that has taken hold since businessman Ramaphosa was elected leader of the ruling African National Congress in December and then President of South Africa.
During Ramaphosa’s maiden state of the nation address, a day after replacing scandal-plagued Jacob Zuma as State President, the rand surged to a three-year best.
Once the dust settled after the budget, urgent implementation of fiscal and structural reforms was needed to retain investor support, he said.
With commodities globally priced in dollars, South Africa’s chief exports such as gold, platinum and coal earn the country higher revenues when the greenback depreciates, helping to close the country’s capital deficit.
In September the Treasury issued a pair of dollar bonds in overseas capital markets worth $2.5 billion, attracting more than double that in bids.
Ramaphosa is expected to change his cabinet soon and appoint a new Finance Minister to replace Malsui Gigaba, hired in March, 2017 by Zuma in a midnight reshuffle that triggered credit downgrades by all three major rating agencies.