South Africans have breathed a collective sigh of relief. After extensive campaigns and infinitely examined possibilities, the election is over, votes have been cast and the counting is underway. But now is not the time for anyone to put their feet up, least of all President Cyril Ramaphosa.
The consequences of a downgrade will ripple through the economy like falling dominoes. A sell-off of rands will cause the currency to weaken and inflation to rise as a result of more expensive imports. A rising fuel price alone has the potential to drive inflation across the economy. In a bid to manage inflation, the South African Reserve Bank could increase interest rates.
It goes without saying that the market will not respond positively to the appointment of people tainted by State Capture, corruption and patronage. However, the president has limited choice and has to stick to the ANC’s prescribed list of candidates, with the exception of two positions where he has the discretion to appoint from the outside.The second milestone: Opening of the 6th Parliament
The government’s ability to support growth through capital expenditure has been hampered by SA’s unsustainable fiscal policy, which has resulted in a deterioration of the public sector’s net worth as it accumulates more debt. The country needs to cut expenditure relative to GDP. However, debt continues to increase, with our debt-to-GDP ratio now at 56.2%.
Similarly, simplifying SA’s visa regime has apparently been prioritised, but appears to have been stalled by the director-general at Home Affairs.South Africa is losing ground against the rest of Africa and other emerging tourist destinations, that is evident in the stats,” says Dykes. “Making SA an attractive tourist destination is such low-hanging fruit all you have to do is open your mouth.
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