Sometimes events rush past you so fast it’s hard to keep track of them all, let alone see how they might interact with each other. That is certainly true of the past week in SA, a week that has been extraordinarily news-filled in a country never short of newsworthy events.First, SA’s GDP contracted by an unexpectedly large amount in the last quarter of 2022, with the economy shrinking by 1.3%.
Second was the Cabinet reshuffle. Much has been written about this, but notably, SA has a new deputy president in Paul Mashatile and a new minister of load shedding in Kgosientsho Ramokgopa. Some of President Cyril Ramaphosa’s opponents have also been sidelined.But a wholesale shake-up of the governing structure, this was not. In some ways, the reshuffle was more significant for what it did not do than for what it did, which was largely anticipated.
Fifth, sadly, is the rand. From the above list of events, inevitably the shock will be absorbed, to the extent it can be, by the value of the currency. As my colleague Ed Stoddard put it, the rand’s decline is emblematic of SA’s economic malaise. There it is in a nutshell.So this is the data; what are the consequences? One thing quickly to bear in mind is that many businesses are reporting their financial results for the year, and often the reports seem pretty good.