Namibian, South African economies will strengthen, analysts say

15 Feb 2018 19:10pm
WINDHOEK, 15 FEB (NAMPA) – Namibian analysts have said Namibia and South Africa’s economies will strengthen following the swearing in of the neighbouring country’s new president.
South African lawmakers on Thursday selected Cyril Ramaphosa as South Africa’s new president after Jacob Zuma resigned Wednesday night.
Zuma resigned after the African National Congress (ANC) asked him to step down.
Political analyst Dr Omu Kakujaha-Matundu told Nampa the political crisis in the ANC was “temporary and artificially created” by Zuma.
“I think the ANC is now going to go back to work. Ramaphosa, who local and international investors trust because of his business background, will put us on a good course,” he said.
Kakujaha-Matundu added this trust would also be reflected in the strengthening of the South African Rand.
He said even if the Rand does not strengthen against major currencies, it will not weaken.
“It has already strengthened significantly and in that way we are on a good course and hopefully it is going to translate into economic growth.”
He also noted that the strengthening of the Rand would mean investor confidence in both countries that could stimulate economic growth, which will provide much needed jobs.
Political analyst, Dr Hoze Riruako also told this agency on Thursday Namibia should monitor what is happening in South Africa closely because of the monetary link between the countries.
He indicated that because Namibia procures at least 80 per cent of its commodities directly from or through South Africa, it helps the country not to deplete its foreign reserves.
“When we buy goods from South Africa, it uses its foreign reserves to procure these goods elsewhere while we buy these goods from South Africa using the Namibian Dollar or South African Rand,” Riruako said.
He noted that the uncertainties that lingered in South Africa over Zuma’s resignation created an investor scare which resulted in them shying away from investing in the neighbouring country.
“In other words, foreign direct investment in South Africa has been going down and the cost of goods skyrocketed. And with the downgrading, it directly impacted the consumption power and the disposable income of the people of both countries,” he added.
Riruako added that investors would have confidence in the overall economy and in the new South African president because he was perceived to be incorruptible and prudent, which is good for both countries.