Experts say that if the vote next month is trouble-free, investor appetite will swing back in South Africa’s favour, and the country will turn towards a \u2018good news story\u2019.<\/p>\n\n\n\n
These are the opinions of renowned economist Dawie Roodt and investment bank Goldman SA CEO, Simon Denny.<\/p>\n\n\n\n
Denny told Bloomberg that South African investors are holding off on big moves before the vote next month.<\/p>\n\n\n\n
“Assuming the vote is trouble-free, we could see quite a significant pickup in foreign interest in both equities and debt,\u201d he said. <\/p>\n\n\n\n
Goldman has significantly expanded its operations in South Africa, tripling headcount over the past five years in its Johannesburg offices, from where it services the rest of sub-Saharan Africa. <\/p>\n\n\n\n
The US bank is betting on growth as energy constraints ease by the end of the year and a smooth outcome in the nation\u2019s most-contested general election since 1994. <\/p>\n\n\n\n
Roodt seemed to agree with this narrative, adding that a positive outcome in the 2024 elections could bolster markets, strengthen the rand, and help grow the economy.<\/p>\n\n\n\n
“Should there be a favourable 2024 election outcome, South Africa will become a good news story,” he said. <\/p>\n\n\n\n
\u201cA good news story will result in the rand strengthening dramatically, lower interest rates, and confidence returning to the economy,\u201d he added.<\/p>\n\n\n\n
However, Roodt warned that there is a risk of a negative outcome, and this includes the ANC forming a coalition with the EFF.<\/p>\n\n\n\n
This scenario can lead to ultra-left, ideologically-driven policies, which can cause tremendous damage to the country, he said.<\/p>\n\n\n\n
However, these are not the only two outcomes on the cards for the election.\u00a0<\/p>\n\n\n\n
There are several possible outcomes for the country’s future, and not all of them are negative. <\/p>\n\n\n\n
One such possibility is the formation of a government of national unity, where political parties like the DA and Freedom Front Plus can have a significant role to play. <\/p>\n\n\n\n
According to Roodt, this presents an opportunity for South Africans to steer the country in the right political direction, which will ultimately strengthen the economy. <\/p>\n\n\n\n
Roodt also highlighted the importance of making wise economic decisions, as the financial markets can be unforgiving and quick to punish poor decisions.<\/p>\n\n\n\n
Even if a coalition with destructive ideologies comes to power, they won’t be able to escape the consequences of their actions in the market. <\/p>\n\n\n\n
As Roodt puts it, “even if Floyd Shivambu becomes the new Finance Minister, he will have to think twice before making any foolish moves.”<\/p>\n\n\n\n