A COMPLETE restructure of the South African economy is necessary in order to build consumer and investor confidence.
Political uncertainly, debt, load shedding, corruption, state capture and the possible nationalisation of the SA Reserve Bank (Sarb), among other issues, have been the deciding factors for many investors to look to international opportunities to create, build and safeguard their wealth.
Although it is clear that there is no quick and easy fix when it comes to driving South Africa's economy towards growth, President Cyril Ramaphosa will now be under serious pressure to streamline his Cabinet and review economic policies, to look carefully at plans around land expropriation without compensation, as well as find a sustainable solution for Eskom and other beleaguered state-owned enterprises.
Another sword hanging over the economy is whether the country will be further downgraded by ratings agency Moody’s in November.
Moody’s is the only rating agency to give South Africa an investment-grade rating. Other major rating agencies, Fitch Rating and S&P Global, downgraded South Africa's credit rating to sub-investment grade in 2017.
An additional downgrade by Moody’s to sub-investment grade will result in the country being ejected from the Citi World Government Bond Index, which requires asset managers to sell billions of rand in South African bonds.