In the midst of all of the doom and gloom floating around South Africa, it was heartening, although surprising at the same time, to hear respected financial news service Bloomberg describe the rand as a “resurgent currency”.
That, along with more foreign investment money coming into South Africa recently, has meant that government bonds now, suddenly, are offering the best return of investment among emerging market countries.
Bloomberg said the economy had started to become more attractive to foreign investors since Cyril Ramaphosa took over as president earlier this year.
That’s good news. But we caution against getting over-excited.
First, the investor interest is more an indication of their profit motives than any endorsement of the Ramaphosa administration. Second, the country is still mired deeply in debt and unemployment figures – released this week – are the worst on record.
Real investors – as opposed to speculators looking to make quick money – are still worried about government plans to expropriate property without compensation. Political instability and crime are also serious negatives that outsiders will consider before putting money into a country. We need to do much better on both of those issues.
But the Bloomberg assessment does show our potential as a nation.