South Africa

South Africa Politics May 2024

South Africa:

The next government will face multiple challenges and should focus on implementing structural reforms to set the economy free from the various crisis that have held growth hostage in recent years: Crippling corruption, rampant crime—taking away around USD 40 billion yearly from GDP, according to the World Bank—sky-high unemployment, mass poverty and the world’s most unequal. Moreover, recurrent power supply cuts and decaying infrastructure have hampered GDP growth in recent years. This, in turn, has led to weak public revenue, hurting fiscal consolidation efforts and leaving the government unable to bring public debt under control—which our panelists expect it will peak in 2024 at around 80% of GDP.

With the ANC’s anticipated loss of support, the country will be entering unexplored waters, triggering the jitters among investors, hurting the rand and investment in the short term. More positively, if the ANC sees the writing on the wall it might get more serious about implementing much-needed, policies to get economic growth out of the doldrums. Otherwise, social unrest might grow, threatening the stability of Africa’s largest economy.

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