Economists have estimated how much the South African rand would improve if Jacob Zuma stepped down as president of the country.<\/p>\n
Consensus among them in a report by Reuters<\/a>, is an almost immediate improvement of 10% to 15% – representing a R670 billion boost to the economy.<\/p>\n A day before Zuma took his Oath of Office on 9 April 2009, the rand traded at R8.45 against the greenback. A euro was worth R11.33; and a single UK pound was R12.71.<\/p>\n On Friday, the rand traded at R13.48, R14.98, and R16.77 against the three respective currencies, having recovered from R17.99 to dollar in January.<\/p>\n Zuma has jumped from one scandal to the next during his time as president, and has taken the country’s economy down with him each time.<\/p>\n South Africans have gotten poorer under Zuma, and still face the prospect of a sovereign ratings downgrade to junk status by the international rating agencies before the end of the year.<\/p>\n While the ANC and the presidency itself has denied that the economy is tied to the actions of one man – just looking at how markets react at every turn, provides evidence to the contrary.<\/p>\n Read:\u00a0Zuma vs Gordhan vs the rand<\/a><\/strong><\/p>\n Most recently, high profile charges against finance minister Pravin Gordhan – seen as a political plot, orchestrated by those allied to Zuma – were dropped, leading to the strengthening of the rand.<\/p>\n Soon after, a damning report into allegations of state capture was released by the Public Protector of South Africa, which again lead to a strengthening of the markets. The report implicates Zuma as a central figure to state capture along with the Gupta family.<\/p>\n According to market researcher and analyst at Nomura, Peter Attard Montalto, any movement closer to Zuma being removed from office – or any event that makes that a more likely outcome – is seen as a positive by the market and investors.<\/p>\n Consensus among economists\u00a0– including Attard Montalto; Kevin Lings, chief economist at Johannesburg fund manager Stanlib; and\u00a0Gary van Staden, a political analyst at NKC African Economics – is that, upon a Zuma-exit, the rand would strengthen by at least 10%, up to 15%.<\/p>\n With South Africa’s economic value at around R4.7 trillion ($318 billion), this would represent an immediate $50 billion (R670 billion) improvement<\/strong> in the economy – and would put the rand at around R11.50 to the dollar<\/strong>.<\/p>\n While the economists agree that Zuma carries a high risk profile for South Africa, they noted that his removal from office would only be one step in a much bigger journey to getting the rand back to ‘fair value’.<\/p>\n How Zuma and friends tried to frustrate the state capture investigation<\/a><\/strong><\/p>\nMore on Zuma<\/h3>\n