Neelam Rahim | neelam@radioislam.co.za

2-minute read
02 June 2024 | 08:24 CAT

Image/ Bloomberg

Investors are monitoring South Africa’s 2024 election closely. The Rand held steady on Tuesday morning, although it was on edge ahead of Wednesday’s pivotal poll. Market reactions are believed to unfold over days as results trickle in.

Investors may have to wait for the Rand’s post-election outlook, as the final tally is expected only by Sunday.

In an interview with Radio Islam International, Dawie Roodt, Efficient Group’s Chief Economist, highlighted the importance of the capital market and the Rand.

South African markets rallied in May amid expectations that the next government will be headed by the ruling African National Congress and have a market-friendly coalition partner, signalling policy continuity.

“The financial market was discounting the possibility of the ANC and coalition with some of the smaller parties and not the EFF,” Roodt pointed out.

Roodt explains that the EFF and ANC coalition frightened the financial markets but have recently seen the likelihood of the coalition diminishing, which is good news for the financial markets.

Meanwhile, speaking of the interest from foreign investors and markets, Roodt said that while stability is important, there are more than variables.

The reality is that the ANC’s ideological convictions and policies have changed over time and have moved more to their left.

“Another reality is economic growth and policy certainty which is not always there. The Efficiency of government to Implement these policies is a major problem in South Africa,” Roodt explained.

According to Roodt, these variables combined have encouraged low confidence in South Africa from local and international investors, including consumers.

Listen to the full interview on The Daily Round Up with  Moulana Junaid Kharsany.