Stubborn Zuma drags SADC down
South African leader Jacob Zuma's continued stubbornness, amid ongoing calls for his resignation, including by the new leadership of his African National Congress (ANC), has a direct impact on regional economies, which analysts believe will recover immediately once he resigns.
Namibia, whose currency is pegged to the South African rand, has been severely affected by the spillover of the corruption and state capture allegations swirling around Zuma's administration, which have resulted in the rand tanking against major currencies before Cyril Ramaphosa's election as the new ANC president last year.
The rand, and by implication the Namibian dollar, has strengthened to N$12 to the US dollar since December last year, with analysts predicting that it will surpass R11.50 to the greenback if Zuma goes.
Analysts agreed yesterday that an early Zuma exit would increase political and economic certainty in countries such as Namibia, as well as boost investor confidence in South Africa.
Economist Klaus Schade believes that since South Africa is regarded as the economic powerhouse in the region, the Southern African Development Community (SADC) stands to benefit greatly once Zuma steps down.
“The region will benefit as well from improvements in investor and in general business confidence. However, it will take time and concerted efforts to reduce and root out corruption in the country, even once Zuma has left.
“Likewise, bringing SOEs (state-owned enterprises) back on track, for example South Africa Airways (SAA) and Eskom, is important in order to improve the reliability of efficient service delivery vital for economic growth,” he says.
South African political commentator Professor Nixon Kariithi believes Namibia can play a role in solving the current political stalemate in South Africa.
“From a political point of view, Namibia has seen very smooth transitions of power. I think it may reach out to its neighbour with a sense of saying there is a bigger mission or objective for liberation parties, such as the ANC. Namibia has been independent longer,” he argues.
He believes that although the political situation has eroded the South African economy, it may not be too difficult to rebuild it once Zuma has left.
“There seems to be a sense among analysts that the underlying fundamentals are not as bad and recovery can come fairly fast,” he says.
Kariithi adds that a quick resolution to the Zuma exit saga would certainly see a much better financial market and an improved currency.
He is also optimistic that with Zuma out of the way the private sector will be emboldened to push for economic growth that creates jobs, as opposed to the current wait-and-see attitude.
During Zuma's presidency, the weaker South African rand has translated into increased costs for imported goods and services, and ultimately put consumer spending under pressure in Namibia too.
Yesterday, the ANC national executive committee tried to finalise an exit strategy for the embattled leader. This coincided with parliament postponing the country's annual state of the nation address, which was interpreted as another pointer that Zuma will be out of office soon.
However, Zuma is hell-bent on delaying his exit as he battles to secure some sort of deal that will ensure a soft landing, amid state capture investigations and an expected decision on whether he will have to face 783 charges of corruption linked to South Africa's arms deal.
JEMIMA BEUKES
Namibia, whose currency is pegged to the South African rand, has been severely affected by the spillover of the corruption and state capture allegations swirling around Zuma's administration, which have resulted in the rand tanking against major currencies before Cyril Ramaphosa's election as the new ANC president last year.
The rand, and by implication the Namibian dollar, has strengthened to N$12 to the US dollar since December last year, with analysts predicting that it will surpass R11.50 to the greenback if Zuma goes.
Analysts agreed yesterday that an early Zuma exit would increase political and economic certainty in countries such as Namibia, as well as boost investor confidence in South Africa.
Economist Klaus Schade believes that since South Africa is regarded as the economic powerhouse in the region, the Southern African Development Community (SADC) stands to benefit greatly once Zuma steps down.
“The region will benefit as well from improvements in investor and in general business confidence. However, it will take time and concerted efforts to reduce and root out corruption in the country, even once Zuma has left.
“Likewise, bringing SOEs (state-owned enterprises) back on track, for example South Africa Airways (SAA) and Eskom, is important in order to improve the reliability of efficient service delivery vital for economic growth,” he says.
South African political commentator Professor Nixon Kariithi believes Namibia can play a role in solving the current political stalemate in South Africa.
“From a political point of view, Namibia has seen very smooth transitions of power. I think it may reach out to its neighbour with a sense of saying there is a bigger mission or objective for liberation parties, such as the ANC. Namibia has been independent longer,” he argues.
He believes that although the political situation has eroded the South African economy, it may not be too difficult to rebuild it once Zuma has left.
“There seems to be a sense among analysts that the underlying fundamentals are not as bad and recovery can come fairly fast,” he says.
Kariithi adds that a quick resolution to the Zuma exit saga would certainly see a much better financial market and an improved currency.
He is also optimistic that with Zuma out of the way the private sector will be emboldened to push for economic growth that creates jobs, as opposed to the current wait-and-see attitude.
During Zuma's presidency, the weaker South African rand has translated into increased costs for imported goods and services, and ultimately put consumer spending under pressure in Namibia too.
Yesterday, the ANC national executive committee tried to finalise an exit strategy for the embattled leader. This coincided with parliament postponing the country's annual state of the nation address, which was interpreted as another pointer that Zuma will be out of office soon.
However, Zuma is hell-bent on delaying his exit as he battles to secure some sort of deal that will ensure a soft landing, amid state capture investigations and an expected decision on whether he will have to face 783 charges of corruption linked to South Africa's arms deal.
JEMIMA BEUKES
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