South Africa enters a challenging phase as President Ramaphosa’s government grapples with trying to grow the economy, reign in debt and reform state owned enterprises amidst growing unemployment, domestic socio-economic tensions and political infighting within the ANC.
Finance Minister Tito Mboweni’s medium term October budget policy statement was met with mixed reviews. It has been seen as a balancing act and attempt to appease opposing interests in South Africa. Negative take-outs include a higher than expected budget deficit and debt ratios, an upward revision in expenditure ceiling, increased tax burden for individuals. Positives include a strong stance on the turnaround of State-owned enterprises, no Eskom debt take-on, reducing the public sector wage bill and continued emphasis on the private sector’s important role and Strategic Equity Partnerships.
For a few hours however, there was optimism with a nation united in hope, its hearts swelling with pride, as the Springboks (South Africa’s national rugby team) brought home the Web Ellis World Cup trophy in a convincing victory over England in Japan on Saturday 2nd November 2019. Not since the dark days of apartheid, has a nation needed a sign of hope and unity more than South Africa does now. And the Springboks, led by captain Siya Kolisi, the team’s first black captain, did not disappoint. In his moving acceptance speech which went viral on social media following the match, accompanied by the #BetterTogether, Kolisi dedicated the win to all South Africans, saying that “We're not playing for ourselves any more. We're playing for our people back home”. Siya spoke of the team coming from different backgrounds and races, yet uniting to achieve their goal, making the analogy to inspire South Africans to unite behind a single purpose and overcome differences, saying: "We love you, South Africa, and we can achieve anything if we work together as one." Coach Rassie Erasmus was also lauded for his inspirational leadership and unifying message to his team and the nation.
A proud president Cyril Ramaphosa stood alongside the captain, hoisting the trophy. Perhaps he too was inspired by the Siya Kolisi’s words and will take the momentum of this victory and spirit of unity in South Africa to drive his agenda for change.
Socio-Economic and Political Analysis
BNP Paribas released an insightful analysis in their South Africa 2019/20 policy tracker as part of their Market 360 Strategy & Economic Spring 2019 edition.
Their analysis of socio-economic and political trends identified the many and significant challenges the country faces but also identified areas of opportunities for investors, notably:
- Telecommunications: the rolling out of 5G Spectrum licenses creates significant scope for growth and investment in the ICT sector and has the potential to significantly reduce communication costs , improve internet speed, internet access which creates further opportunities and economic efficiencies.
- Visa and Tourism : South Africa is making some welcome changes to its immigration regime aimed at boosting tourism and making it easier for investors and foreign nationals with skills to work in the country. See below Immigration update.
- Energy and Mining: the revisions of mining and energy policies - in particular the renewable energy independent power procurement program creates opportunities in this sector and gas exploration and investment.
- African Continental Free Trade Agreement: signed into effect in July 2019 by 54 or 55 African countries, the agreement has the potential to facilitate trade, services, tourism, initially offering lower tariff barriers for goods traded within Africa.
- Reducing the turnaround time for critical work skills visas to 4 weeks
- A pilot scheme for the issuing of e-visas for certain visa categories, which applicants will be able to apply for online, eliminating the need for applicants to visit South African missions abroad.
- Visa requirements have been simplified for countries such as China and India (key markets for tourism to South Africa) and the government has also extended the list of countries where visas for travelers have been waived e.g. UAE, Qatar, New Zealand among others.
Immigration Update
The Minister of Home Affairs has announced a number of initiatives including:
- Reducing the turnaround time for critical work skills visas to 4 weeks
- A pilot scheme for the issuing of e-visas for certain visa categories, which applicants will be able to apply for online, eliminating the need for applicants to visit South African missions abroad.
- Visa requirements have been simplified for countries such as China and India (key markets for tourism to South Africa) and the government has also extended the list of countries where visas for travelers have been waived e.g. UAE, Qatar, New Zealand among others.
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