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JOHANNESBURG/NEW YORK — Just over four months ago, South Africa seemed broken. The pre-election conversation focused on power blackouts, violent crime, and choked ports. Fast forward to today, and South Africa is enjoying a stock market rally while promoting its credentials as an investment destination.
When Cyril Ramaphosa met investors on the sidelines of the United Nations General Assembly in New York last week, he was all smiles as he announced that “the business community is responding very positively to our reforms.” South Africa’s stocks have had their strongest third quarter for 11 years, and a key sentiment index has returned to pre-COVID levels.
Investors are putting their faith in the Democratic Alliance, the center-right partner in the nascent coalition government, to give the administration a pro-business edge. But the African National Congress (ANC) also deserves credit for its skill in preparing for coalition politics through early talks with its opponents ahead of the election, write Sam Mkokeli, Alexis Akwagyiram, and Yinka Adegoke.
It’s increasingly clear that South Africa has simply underperformed for years. Africa’s most industrialized nation has the continent’s best infrastructure, its most developed financial market, and a strong judiciary.
Standard Bank CEO Sim Tshabalala told Alexis at Semafor’s Next Three Billion summit last week that South Africa’s problems are “consistent entirely with what happens in a country that was run by a former liberation movement.” It’s too early to tell if this is just post-election euphoria, but South Africa could be entering a new phase.
