Africa's biggest economies


Rand continues to rise as Cyril’s appointment restores investor confidence

ZAR’s Zuma woes are already a thing of the past

Africa's biggest economies


A whirlwind week of politics in South Africa has had an undoubtedly positive impact on the rand, which is nearing its best performance levels for five years.

It would appear that it is a case of “all’s well that ends well” for the ZAR. Before Jacob Zuma finally put pen to paper on his resignation letter, there was a lingering climate of uncertainty that just held the currency back slightly.

However, it maintained its upward trajectory on the back of the ANC’s decision to recall JZ. Opposition parties were also ready to snare him, as they had tabled a motion of no confidence against the former President in case he tried to cling on to power any longer.

Current exchange rate for the rand / ZAR:

One dollar ($1) = R11.59
One pound (£1) = R16.35
One Euro (€1) = R14.54

Has the rand rallied because Zuma left office?

We spoke to Professor Lawrence Hamilton, of Wits University’s Political Studies department. He confirmed to us that the rand’s revival is indeed largely reliant on the change in South Africa’s leadership:

“We’ve seen the rand’s price improve very consistently over a two week period, and the expectation of Zuma leaving was priced in. The rand strengthened on the back of Zuma’s recall, and Ramaphosa’s appointment. In fact, Cyril’s appointment as ANC President two months ago gave the market confidence.”

“We now need to see Cyril follow through on promises for Radical Economic Transformation. The market can react both ways to things like land expropriation policies, but it all depends on how he plans to implement these changes.”

“The weakened dollar has also helped the rand along. But it is our political matters that hold the most significance. Zuma’s fraudulent and reckless activities were the rand’s biggest problem. That problem no longer exists.”

Positive news all round for ZAR

It’s not just a case of Zuma stepping down, either. Professor Lawrence also described Ramaphosa as “a market-friendly leader”. Swapping someone like Zuma for a man with Cyril’s business acumen was always going to accelerate the rand’s performance.

With Ramaphosa now set to steer the ship on SONA 2018, and put the Budget Speech 2018 into action, South Africans can afford to have a drop of positivity for the country’s economic future.

Professor Hamilton is also the author of Are South Africans Free? Published by Bloomsbury, his book is available to buy now.