Zuma must fall – or the economy will: economist
Unless Zuma leaves the presidential office, the economy will continue to crumble, suffering a ratings downgrade and a rand at R20 to the dollar.
This is according to economist and portfolio manager, Abri du Plessis, speaking to Bloomberg.
Du Plessis made the comments in a Bloomberg Brief, speaking about sub-Saharan markets.
The economist believes that, with no change in the Zuma regime, under his leadership a ratings downgrade is likely sometime in 2016, which will be swiftly followed by the rand tanking to R20 to the US dollar.
In trade on Thursday morning (21 January) the rand was still reeling from another sell off, following more news out of China which hit emerging markets hard.
The rand teased R17 to the dollar on Wednesday before pulling back. The currency is currently trading at R16.86 to the dollar.
Du Plessis admitted he was a “big bear” on the South African market, and sees no improvement in the exchange rate under current circumstances.
And he is not alone.
“Fire Zuma”
Chief economist at Efficient Group has listed president Jacob Zuma as one of the five biggest problems facing the South African economy at present, adding that a good start to fixing things would be to fire him.
Economist Mike Schussler had also previously cited the R20 to the dollar mark as a likely eventuality, should current market conditions persist.
Despite the pointed outcry from economists, analysts, citizens and politicians calling for significant changes in the presidency, Zuma has called the response to South Africa’s economic turmoil an exaggeration and an overreaction.
The president said that economists he spoke to could not convince him that his actions led to the current status of South Africa – a view backed up by Finance Minister Pravin Gordhan.
“We are talking about perceptions, that is why I am saying that it was an over-reaction really, from my point of view,” Zuma said.
At a recent event held by the Jacob Zuma Foundation, the president said that the criticism he’s been facing is unfair, and that critics just have it out for him because he came from a poor black background, and managed to make something of himself despite never finishing school.
Emerging markets economist Peter Montalto of Nomura said that it was possible that Zuma might be recalled as president by July 2016, though other experts and people close to the ANC doubt that the president will be going anywhere any time soon.
Prince Mashele, executive director of the Centre for Politics and Research, said that having an uneducated president in charge of the economy is bad news for the country.
“It is very dangerous to have an uneducated president”, Mashele said.
“We don’t need any more evidence of the dangers of an uneducated president…He can’t read numbers.”
“To have a guy who is illiterate when it comes to economics lead a sophisticated economy like ours – that is in dire straits – you must know you are going nowhere,” he said.
More on Zuma
How to fix South Africa’s economy: fire Zuma
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