Following the crumbling state of the country’s economy, analysts have been able to come up with what they think will be a possible solution. For some who believe that the country’s economy is facing challenges common to others in the world, patience and improved economic strategy is their assumed answer. But for those who linked its fall to the president; he must face the consequences.
An economist and portfolio manager, Abri du Plessis, has aired out his view on how best to tackle the country’s economic situation. According to him, the economy of the country will improve only when president Zuma vacates the presidential seat.
Du Plessis made the comments in a briefing with the Bloomberg when he was speaking about sub-Saharan markets.
Du Plessis believes that, with no change in the Zuma regime, under his leadership a rating downgrade is possible in 2016 and this will be swiftly followed by the rand tanking to R20 to the US dollar.
The economist, who is well-known in the South African market, said he saw no improvement in the exchange rate under current circumstances especially as the rand was reeling from another sell off in trade on Thursday. The rand teased R17 to the dollar on Wednesday before pulling back. The currency is currently trading at R16.86 to the dollar.
Still on the same issue, another economist Mike Schussler who is the chief economist at Efficient Group, listed president Jacob Zuma as one of the five biggest problems facing the South African economy at present, adding that a good start to fixing things would be to fire him.
The economist said this as he cited previously the possibility of the rand to fall to R20 to the dollar should current market conditions persist.
However, despite the outcry of some of these economists, citizens and politicians calling for a the president to review his policies and strategies, the presidency seemed no to be moved. To the Zuma, the response to South Africa’s economic turmoil is merely “an exaggeration and an overreaction”.
South Africa had its finance ministers changed three times in less than a week. The first, Nhlanhla Nene, a respected technocrat, was “redeployed” after he objected to wild spending plans. One clash involved the chairman of South African Airways, Dudu Myeni, who wanted the state carrier to buy aeroplanes via an unnamed middleman. Local press speculated that Ms Myeni was one of the president’s mistresses. Jacob Zuma issued a public denial. He replaced Mr Nene with David van Rooyen.
At a recent event held by the Jacob Zuma Foundation, the president said that the criticism he’s been facing is unfair, and that critics just have it out for him because he came from a poor black background, and managed to make something of himself despite never finishing school.
The president said that economists he spoke to were unable to convince him that his actions led to the current status of South Africa. “We are talking about perceptions, that is why I am saying that it was an over-reaction really, from my point of view,” Zuma said.
Emerging markets economist Peter Montalto of Nomura announced the possibility of Zuma being recalled as president by July 2016 though other experts who aligned to the ANC doubt it.
Its been alleged that since Mr Zuma came to power in 2009, South Africa’s finances have grown more precarious with the budget deficit is 3.8% of GDP. Public debt has also been said to have ballooned from 26% to almost 50%and even many analysts still expect more downgrade in 2016 and that could be disastrous.
The executive director of the Centre for Politics and Research, Prince Mashele had said that having an uneducated president in charge of the economy is bad news for the country.
“It is very dangerous to have an uneducated president”, Mashele said.
“We don’t need any more evidence of the dangers of an uneducated president…He can’t read numbers.”
“To have a guy who is illiterate when it comes to economics lead a sophisticated economy like ours – that is in dire straits – you must know you are going nowhere,” he said