Yesterday's South African budget statement has done little to assuage the fears of international investors. The nation has run out of the credit she gained from achieving racial equality under Nelson Mandela and the mini-boost achieved by the replacement of Jacob Zuma by the more market-orientated Cyril Ramaphosa. Much of the trouble has been caused by corruption, an all too common symptom of a previously disadvantaged group taking over the reins of power. Typical of the pattern of politicians dipping into public funds without investing for the future has been the state electricity supplier, Eskom, with the resulting power outages shown on BBC television this week.
The South African concludes: "Given that the government are determined to stand by Eskom – without meeting a full bailout package – Mboweni and his team aren’t likely to convince Moody’s that things will only get better." It will be some time before the South African economy will regain its top spot on the continent recently lost to Nigeria.
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