Last week was a big week for South Africa, and things are moving pretty swiftly here on the Southern tip of Africa.
Let’s start with the budget. It was pretty boring, and that’s exactly what you want from a budget presentation. Boring!! If you ignore the continued bailouts for SOE’s running into many hundreds of billions of Rands.
And then of course as expected, SA has just been grey listed by FATF for not having adequate money laundering processes in place. Im not sure whether the Presidents Phala Phala scandal contributed to this effective downgrading, but even if it didn’t, the listing is another negative mark in a long list of own goals that we as a nation have scored in our continued downward spiral.
And then of course Eskom continues to dominate headlines for all the wrong reasons. The ongoing load shedding is obviously a drag on the economy, but when viewed in the light of the outgoing CEO’s revelations, it’s nothing short of treason. Criminal syndicates hollowing out the energy utility at the expense of Joe Citizen shows just how far our beloved nation has deteriorated.
News headlines in the coming week will be dominated by revelations of just how far up in the chain the criminality extends.
And the ruling party’s response has been telling. Instead of knuckling down and trying to get to the bottom of recent revelations, the party has summarily dismissed the now Ex CEO and has threatened him with legal action. This was the same response that they employed when details of the Spurs sponsorship deal were revealed. Go after the whistle blower in an attempt to sidestep the fallout from the details of obvious maleficence.
So now we wait for a Cabinet reshuffle and the announcement of an Electricity Minister. I for one am not expecting any positive outcomes from this little exercise. Expect more of the same. Political appointments will be made to appease factional interests and we will continue to meander down the road of global irrelevance.
Whilst all this has been going on, South Africa has been busy with military drills together with Russia and China. Our support for Russia one year on from Russia’s invasion of the Ukraine will probably also lead to negative outcomes.
The U.S congress is now looking at our alignment with Russia as a reason to cancel some of the favorable trade treaties that we currently enjoy.
When one looks back over the last twenty we are amazed at just how far we have fallen. In the first 10 years of democracy, South Africa enjoyed an immense amount of international goodwill and our geopolitical standing punched well above our weight class. Not so much these days.
In the short term there is a significant of bad news priced into the ZAR, and so any small shift in sentiment may usher in a brief period of ZAR retracement. But the macro mood remains very poor and it's difficult to see where any good news may materialize.
Well done to our National Ladies cricket team, they managed to lift the national mood somewhat by reaching the World Cup finals. Sadly they were not able to overcome a rampant Australian team who went on to claim yet another World Cup victory.
We need all the good news we can get here….for now though the hits keep on coming.
At least the Formula 1 season starts soon….if Ferrari like Liverpool cannot get their act together it may prove to be a very depressing season.