Labour unrest and the power crisis will work together to hamper South Africa’s growth in 2015.
Global business risk consultancy Control Risks yesterday launched its annual RiskMap report at a briefing attended by South African business leaders in Johannesburg. RiskMap is an authoritative guide and a key reference point for policy-makers and business leaders seeking to plot global trends over the coming year.
RiskMap highlights the most significant underlying trends in global risk and security, and provides a detailed view from the markets that will matter most in 2015.
The report indicates that 2015 may indicate limits to sub-Saharan Africa’s growth story. As economic growth outpaces political reform, politics will remain a central risk factor for investors.
Extremism will continue to make headlines across Africa in 2015, raising concerns about regional powers’ ability to deal with its threat.
Competition for influence and membership between rival labour union factions in South Africa is a risk factor for continuing strikes in 2015.
In Mozambique, uncertainty about policy and extractive industry law reform remains a key risk.
George Nicholls, MD: Southern Africa at Control Risks, comments: “2015 is the year when we will see political failings impact Africa’s growth story. Governments have so far failed to tackle key structural issues and growth usually occurs despite government rather than because of it.
“Labour unrest and the power crisis remain drags on South Africa’s economic growth. Divisions within the ruling party, and perceptions of corruption and lack of accountability by the executive continue to create unease among investors.
“The ANC’s response to criticism of its failure to address persistent socioeconomic grievances has largely been to increase populist rhetoric around such issues as land reform and state involvement in extractives and power sectors, though we expect the centrist elements within the ANC to stem this translating into policy.
“However, the focus of opposition criticism on President Zuma as a means of attacking the ANC is driving a much more fractious parliament, which will slow down policy-making under the current government,” Nicholls adds.
“Terrorism will continue to make headlines in Africa in 2015. Regional groups are unlikely to replicate the methods or success of Islamic State (IS) on the continent, but the response will remain fragmented. In 2015, extremism and its effects will persist.”
