Ramaphosa: 2017 will be less turbulent for SA economy

Speaking at the WEF 2017 gathering, Ramaphosa says this year will usher in a more stable environment for the economy.

FILE: Deputy President Cyril Ramaphosa. Picture: GCIS

SWITZERLAND – Deputy President Cyril Ramaphosa says South Africa went through a turbulent year last year, but that 2017 will be better.

He’s been speaking on the sidelines of the World Economic Forum in Davos, Switzerland.

Ramaphosa says South Africa’s institutions acted as shock absorbers for the country last year.

He says this is going to be a better year for the country.

“I have no doubt that 2017 ushers in a much more stable environment in our economy. We are, of course like many other countries, going to be facing slow growth that we went through.”

SA ECONOMY IN REVIEW

President Jacob Zuma fired Nene just over a year ago, and replaced him with little-known Member of Parliament Des van Rooyen.

When the decision sent the markets into a tail spin, the business sector and senior African National Congress leaders pressured the president into replacing Van Rooyen with Pravin Gordhan.

WATCH: Markets react to Finance Ministry musical chairs

Banking shares dropped by more than 10% to levels last seen after the 2008 global financial crash.

This was attributed to bond yields which increased after Zuma’s announcement of his decision to remove Nene from the Finance Ministry.

In November 2016, South Africa’s business confidence fell in the fourth quarter, an outcome which was seen to jeopardise efforts to boost economic growth and avert credit rating downgrades.

The Rand Merchant Bank (RMB) index, compiled by the Bureau for Economic Research, fell to 38 points in the fourth quarter from 42 in the three months to September, weighed down by a weaker currency and high fuel prices.

A December survey later showed that business confidence in South Africa was steady from the prior month, with export and import volumes and the value of building plans improving.

Economic growth has been slowing since 2011, and the country is now in a downward phase. Many agreed that the situation has been worsened by an erratic political climate.

LISTEN: The 2016 SA economy in review

While South Africa managed to avert a ratings downgrade last year, some analysts warn that the country is not out of the woods yet.

Last week ratings agency Standard & Poor’s Global warned that South Africa's sovereign credit rating still hangs in the balance.

The credit ratings agency last year kept the country at one level above junk status with a negative outlook, but has warned government to kick economic growth into gear to avoid sub investment grade in the future.

For more news, analysis and insights on Davos 2017 go to EWN’s WEF portal in partnership with Ashburton Investments.

(Edited by Masechaba Sefularo)