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Sun Oct 23 13:55:54 CAT 2016

Make-or-break year

Nivashni Nair, Leonie Wagner, Andile Ndlovu and Azizzar Mosupi | 04 January, 2016 00:06

This year is going to be South Africa's make-or-break year as the country faces a series of hammer blows that will either set it on the road to success or undermine the gains of democracy.

The following are the challenges that the country will have to deal with and overcome:


The economy will continue to experience headwinds on the back of power and water shortages, rising interest rates, protests and the impact of slowing Chinese economic growth, Scotiabank predicts.

It further says the prospects of the rand are not overly positive.

Reeling from the knock-on effects of having three finance ministers in one week, the subsequent plunge of the rand and the downgrading of South Africa's credit rating to a notch above junk status, the economy could "at best see a growth of about 1% or worst case scenario: a recession".

Analysts say even bringing back Pravin Gordhan as finance minister is unlikely to save South Africa from being downgraded to junk status.

"I do think it's going to happen. If not early this year, then later this year. If that happens, all sorts of bad things will happen. The rand will go weaker and we will have even more inflationary pressures, higher interest rates and slower economic growth," one analyst says.

To crawl back, analysts say leaders would need to do the right things - tighten the belt and encourage an environment in which economic growth can take place.


South Africans are likely to see the real effects of the crippling drought in supermarkets.

Economist Dawie Roodt said the combined effects of a weak currency and the drought could result in double-figure food price hikes.

"Agriculture is relatively small at only 3% of the economy. But it has a knock-on effect on all the other sectors. Very importantly maize, which is used for human consumption, is also used for chicken and in beef. If we don't have a proper maize harvest and a currency that is taking a huge knock, it's very expensive. This will have a knock-on effect on food and meat prices in general," Roodt said.

He said even if the dry spell was broken, the impact of the drought would continue to "affect the economy quite severely".


After some dodgy and irrational decisions, there have been calls for President Zuma to be ''recalled".

Though political analysts have described Zuma's position as "shaky", this does not mean he will be forced to resign.

Political analyst Shadrack Gutto said: "[Zuma's] position is shaky at the moment. One can't say he will never be recalled but it doesn't seem likely to happen before the local government elections because that could have a negative impact on the elections."

He said despite Zuma's "unpredictable nature" following his firing and hiring of finance ministers late last year, he still remained "the devil the ANC knows".

While a recall might not be likely, opposition parties have ample ammunition with which to attack the president given the court battles he is set to face this year.

Next month, the Constitutional Court will hear arguments in the case in which opposition parties want the court to order Zuma to implement Public Protector Thuli Madonsela's recommendations to pay back the money used to upgrade his Nkandla home.

In March, the spy tapes saga will continue in the North Gauteng High Court in Pretoria, where the DA wants the 2009 decision to drop corruption charges against Zuma to be reversed.


There is a lot at stake for the ruling party in the 2016 municipal elections. According to political analysts, some alliances between parties are imminent but this may only emerge after the elections.

Gutto said Zuma's time as president depended on how the ANC performed in the local government elections. He said should the ruling party lose any of its metros, he might be forced to resign.

Political scientist Keith Gottschalk said that the DA was expected to continue seeking alliances with smaller parties.


The #FeesMustFall movement further eroded the president's credibility last year when he capitulated to the students' demands after a week-and-a-half of protests.

Student representatives have also said they could not guarantee that protest action will not resume when varsities reopen. But with the victory of a zero-percent fee hike for this year, R2.3-billion will be needed to accommodate this development. These funds will need to come from the already strained budget for the current financial year.

The prospect of students protesting again outside the Union Buildings could have an effect on the coming elections and an already weakened president.

Service-delivery protests could turn violent unless protesters and police show restraint.


One of South Africa's major sports is also at a crossroads. The Rugby World Cup was a swansong for many players but it also proved the undoing of Heyneke Meyer, who walked away from the job in December.

The SA Rugby Union hierarchy has been whittling down the list of candidates for the job, which demands more from its incumbent, what with Saru's rigorous transformation drive.

The next Rugby World Cup in Japan is 44 months away, and the next coach is expected to oversee a Springbok team represented by 50% white and 50% black players by then. At the end of last year, Saru president Oregan Hoskins suggested transformation would be top priority for the incoming coach. The new Bok coach, expected to be announced early this year, can't do much worse than Meyer.

He will need the unions to pull their weight when it comes to developing and promoting players of colour. Transformation in cricket is also expected to take centre-stage this year amid indications that Cricket SA is beginning to exert more pressure on domestic franchises to increase the selection of black players.


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