Major policy changes in South Africa are unlikely this year ahead of the December national conference of the governing African National Congress (ANC) in Mangaung, Control Risks said on Monday.

In its latest version of the yearly ‘RiskMap’, it stated that a measured evaluation of government policies, notably in the mining sector, was only likely to take place from 2013 onwards, with more definitive policies emerging as South Africa moved towards national elections in 2014.

“All roads lead to Mangaung where the 53^rd ANC national conference will take place in December, with nationalisation high on the agenda. This, and debate on President [Jacob] Zuma’s re-election will dominate politics in the coming year,” stated Control Risks associate analyst sub-Saharan Africa Simiso Velempini.

She added that while suspended ANC Youth League (ANCYL) president Julius Malema would emerge weakened from his disciplinary hearing, he could serve as a lightning rod for anti-Zuma sentiment within the ANC and would retain access to patronage networks and a political platform.

“Anti-Zuma factions, disillusioned by increased nepotism and Zuma’s failure to deliver on reform promises, will back the ANCYL’s attempts to install a new ANC president, intensifying factionalism,” Velempini said.

On the back foot in early 2012, Zuma was likely to make increasingly strong statements reassuring investors that neither the government, nor the ANC supported nationalism.

With regard to mining and land redistribution, emphasis would be placed on the supremacy of the Constitution and a respect for property rights in a bid to calm jittery investors.

“Despite this, contradictory statements from anti-Zuma factions looking to weaken the President ahead of the leadership election will dent investor confidence,” she stated.

Further, frustration over the slow pace of service delivery and high unemployment could spark protests, organised by labour unions seeking to diversify their interests to encompass temporarily unemployed and economically marginalised individuals.

Velempini said that while less likely to prompt mass walkouts, such issues would have the potential to mobilise the workforce and disrupt operations.
Commenting on South African companies expanding into the rest of the continent, senior consultant for the Middle East and Africa, Pamela Wadi, said that investment opportunities for local and regional investors exceeded the risks.

Investment into Africa was booming and despite mining remaining a big sector, other major growth areas for 2012 included infrastructure and the consumer market with its associated industries, such as telecoms, financial services and the retail sector.

She stated that Africa’s economic outlook remained positive, with organisations such as the African Development Bank expecting the continent’s average growth rate to exceed 5.8% in 2012.

This growth was in line with the current trend among investors looking to emerging markets, as once stable markets in the developed world bent under the global financial crisis and unsustainable debt.

“The risk of expanding too fast into uncertain and hostile environments remains pertinent, but with the right approach, the investment opportunities for South African and regional investors into the continent exceed the risks.”

While sub-Saharan Africa has been spared the wave of unrest and regime change that has beset North Africa and parts of the Middle East last year, some regimes south of the Sahara faced a negative political trajectory, Control Risks warned.

It singled out three countries that showed “worrying trends” in political stability, including Senegal, Burkina Faso and Cameroon.

Social protest was expected to continue on a global level and alter the risk landscape in the year ahead. Even if it succeeded in avoiding another recession, the global economy would remain weak and subject to volatile food and energy prices.