South Africa: Winds of change are blowing.

Cyril Ramaphosa was recently elected the new president of
the ANC, South Africa's ruling party, which may pave the
way for a return to economic prosperity. Photo: Reuters

Last year was another challenging one for South Africa. Sluggish economic growth, political uncertainty, mounting fiscal pressure and weakening governance led two of the three largest credit rating agencies to push the country’s foreign currency rating below investment grade.

But there was a ray of hope towards year-end, and 2018 could well turn out to be a year of major political change in the country. Cyril Ramaphosa was recently elected the new president of the ANC, South Africa’s ruling party, which may pave the way for a return to economic prosperity.

Ramaphosa’s task of restoring the weak business confidence won’t be easy. The economy remains constrained by endemic corruption, high unemployment and a rigid labor market. Headwinds to reform persist, as shown by a nearly even split between supporters of President Jacob Zuma and the pro-Ramaphosa faction within the ANC’s National Executive Committee. And compromises will be needed to unify the party factions ahead of the 2019 general election, which could cloud the reform outlook and lead to market disappointments.

By Jorge O. Mariscal. 

Full story at Ejin Sight.