Business

Warren Thompson
2 minute read
19 Dec 2017
8:00 am

Good beginning for Cyril as rand firms

Warren Thompson

Many challenges to consider and confront to turn around SA’s ailing economy.

What will widely be regarded as the start of the country beginning to renew itself, the 4 708 eligible delegates of the ANC have elected Cyril Ramaphosa as the organisation’s president.

In the end, it was much closer than anyone predicted. Ramaphosa won by a couple of hundred votes: 2 440 to Nkosazana Dlamini-Zuma’s 2 261. But a win is a win.

The markets had predicted it. The rand has been systematically strengthening from its post budget levels of R14.50 to the dollar since early results from the branch meetings began to emerge.

Over the weekend the rand firmed to R12.80 against the dollar, and just ahead of the announcement it was trading as low as R12.63 against the greenback, and fell to R12.59 at the announcement.

Similarly, the 10-year government bond yields that reached 9.30% post the budget have fallen all the way down to below 9%. This is but a small step. At the top of his to-do list will be what Ramaphosa decides to do about President Jacob Zuma, who, arguably, has presided over the most disastrous period in the organisation’s history.

Will he move to recall him as soon as possible, and give himself the maximum amount of time to renew the organisation ahead of the 2019 general elections? How will he salvage the country’s investment grade credit rating, which will allow the government to deliver services and products that it has sustained in the past?

And, more importantly, how will the ruling party go about enacting deep transformative change to the economy? These will all be challenges for the new president to consider and confront.

Will he salvage the country’s investment grade credit rating which will allow the government to deliver services and products that it has sustained in the past? And, more importantly, how will the ruling party go about enacting deep transformative change to the economy? These will all be challenges for the new president to consider and confront.

But it is a start.

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