The leadership of the African National Congress (ANC) elected lawyer, former labour union leader, billionaire businessperson and veteran politician Cyril Ramaphosa as president of the party during the organisation’s 54th National Conference, held at the Nasrec Expo Centre in December 2017. The South African Parliament elected him as President of the Republic of South Africa in February 2018. President Ramaphosa campaigned for the party presidency in 2017 with an economic recovery plan that he referred to as a ‘New Deal for South Africa’. Central to this is the restoring of confidence amongst investors.

This report firstly looks at the economic and political decline in the country on the road to the Nasrec conference, and suggests that December 2017 was a turning point in this decline. Secondly, the report identifies strong fundamentals and positive factors for investment that have remained in spite of the above-mentioned declines. Thirdly, the report reflects on the appointment of President Ramaphosa and his plans for the future – the ‘New Deal’ as well as a ten-point action plan for turning the economy around. This is evident in the fourth section of the report, which reflects on significant progress seen during the first 40 days of President Ramaphosa’s leading the ANC.

Within this context, the fifth section of the report considers the possible future scenarios for South Africa over a five-year horizon (towards 2022). The varying degrees of success that President Ramaphosa may have with making the necessary changes to improve governance and the health of the South African economy inform five alternative scenarios. Under the alternate futures, South Africa may see different outcomes regarding economic growth, sovereign ratings, the results of the 2019 elections and the trajectory of the rand exchange rate.

At the time of writing, the most likely scenario is that President Ramaphosa is able to make the necessary changes and reforms to help economic growth accelerate to as high as 3% by 2022. While this will fall somewhat short of his New Deal aspirations, PwC sees a 75% probability of improved economic growth under President Ramaphosa compared to the preceding several years. The final section of the report considers what this outcome could entail for the reader’s deal, industry or company. The discussion concludes with illustrative examples of how the five scenarios would affect selected industries.

Report by PwC