Picture: Siphiwe Sibeko/Reuters

JOHANNESBURG - The South African Institute of Race Relations (IRR) said on Thursday that former President Jacob Zuma's departure strengthens prospect of economic recovery.

Zuma stepped down as president of the country late Wednesday following sustained pressure from the ruling African National Congress (ANC) to either resign or face a motion of no confidence in Parliament. 

He has been succeeded by ANC president Cyril Ramaphosa who was sworn in on Thursday afternoon.

South Africa's currency, the rand, made some major gains on Wednesday night as Zuma resigned, reaching highs against the US dollar that it had not seen since 2015.

The rand was trading at two percent higher and was at R11.71 to the dollar on Wednesday evening, strengthening even further to R11.66 to the dollar at the very moment that Zuma announced that he would be resigning. `

IRR chief executive Frans Cronje predicted that South Africa's economic growth rate could recover to between 1.7 percent and 1.9 percent this year. 

Cronje said: "If a compelling case can be made for growth and fiscal prudence in the State of the Nation Address and the Budget Speech to follow, the odds of a further rating downgrade fall to below 50%."

Cronje said he was also of the view that the ANC should comfortably attain a majority of above 60% in the next election, but economic growth would be key to maintaining that majority.

"Maintaining such a majority will be determined in the main in the economy. The government must aspire to growth rates of above five percent of GDP over its next term to have any hope of significantly eroding the unemployment rate," Cronje said.

 African News Agency/ANA