Within the African continent, the ZAR keeps meeting up among the local champions, it is however, having a woeful run on the international stage.
This is mostly with USD to ZAR exchange in recent times moving from uncertainties to uncertainties. The exchange has shown the South African currency performing in the most dismal manner.
ZAR’s woes against the US Dollar and other top global currencies did not come out of the blues. The stage for USD To ZAR poor performance seem more of an artificial design than of natural making. This is very clear when one wants to put recent happenings in the country into perspective.
USD TO ZAR: How it Got Here
The Zuma Factor has to be top on the list as regards the poor and dismal journey of the Rand. Although before the arrival of Zuma the Rand was not doing a wonderful job, it was not doing a shameful job either.
Today however, with the USD To ZAR exchange, ZAR sees a looming disaster when it looks at itself in the mirror because of the poor choices and political confusion associated with Zuma.
- President Jacob Zuma
More so, Zuma has worn a cloak of corruption which has affected the country’s economy. Zuma’s History of corruption predates his ascension to power.
The case of corruption still followed him to the exalted seat of power and in recent times, it is greatly affecting the country’s economy. This is even more true with the case linking Zuma to diverting contracts to the Gupta family.
The political ‘rascality’ of Jacob Zuma is another massive negative driving force for the ZAR against USD. Zuma’s gesture of political activities is “to hell with everyone”. Except of course his major financiers, the Guptas. This has brought the country against the man making investors rethink their stay in the country amidst such drive.
Apart from the Zuma factor, the crisis ridden finance ministry has also contributed to the poor ZAR to USD show. One still may not be able to absolve Zuma from this as well. The ministry has seen three Finance Ministers between 2014 and 2016. The constant change in the Finance Minister of the country has limited the stability of economic policies and development of the country.
- SA Finance Minister Pravin Gordhan
At the moment there is still crisis in the finance office as how to oust the present Finance Minister, Pravin Gordhan is thickening.
Unemployment is another factor that has contributed to the poor run of the ZAR against the USD. This has made South Africans to adopt an unfriendly face towards foreign investors. With the Xenophobic attacks, which has made the unemployment case in the country more explicit, foreigners are now scared of investing in the country. This does not bode well for the RAND.
What The Future Holds For ZAR
The future of the RAND looks even worse than its recent past. On one end the political crisis in the country is muddling the economy, on another end, the power tussle for the control of Finance is making matters worse.
Probably among Zuma’s economic analysts there are some telling him all is well with the future of the RAND. Other economic analysts both within the country and outside however, are predicting bad times for ZAR in the nearest future despite the recent 3.3% growth in the economy
The question now is for how long can ZAR maintain its local championship among other African currencies?
Way Out For The RAND
Salvaging the RAND at the moment is highly unlikely. It is however not impossible.
The first step towards salvaging the RAND is the resignation of Zuma. At the moment the country is consumed in thick bad blood caused by the president. His decent exit from the stage of power may allow for rebuilding of trust in the country and give investors a more convenient atmosphere.
However, the Finance Crisis may end, but the country will still need to develop a lasting Finance committee to redraw a long term financial plan for the country. This will be most important so as to bring in present realities into it.
More so, South Africa must learn the effects of corruption and unemployment from other African countries like Nigeria. It is not enough for the country to get relaxed with its recent successes against Nigeria.
It is rather pertinent that it looks at how low corruption and unemployment have brought Nigeria and the Naira, and ensure it doesn’t happen to South Africa and the RAND