The risks to South Africa’s economy going into 2024

 ·4 Dec 2023

General elections due in 2024 are among the key risks facing South Africa’s economy, said Reserve Bank Governor Lesetja Kganyago.

Politicians adopting a populist tone ahead of the presidential and legislative vote may create uncertainty among foreign investors, undermining the case for investing in South Africa, Kganyago said in an interview with the Johannesburg-based City Press newspaper.

South Africa is expected to hold general elections by May.

“I think by now we’ve had enough elections to know that, around this time of the season, there are these kinds of noises,” Kganyago said, referring to “muddy noise about institutions and so forth.”

Global interest rates that are expected to remain higher for longer, along with geopolitical tensions, including Russia’s conflict with Ukraine, are also a threat to the outlook, Kganyago said.

In addition, South Africa faces “idiosyncratic risks,” including the electricity crisis — the nation has been subjected to record power outages this year — and logistics bottlenecks stemming from problems at the nation’s ports and railways, he added.

The constraints “have implications not just for growth; they could also have implications for prices because we might not be able to get the important material we may need to produce,” Kganyago said.

“But they could also have implications because we’re not capable of taking advantage of our markets since we can’t get the bulk commodities out to market.”

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