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Rand will self-correct, no matter the outcome of ANC elections - Gigaba

Dec 16 2017 08:00
Lameez Omarjee

Johannesburg – Despite short-term volatility expected in the rand following the outcome of the ANC leadership race, Finance Minister Malusi Gigaba believes the rand will “self-correct”.

Gigaba was speaking to media at the JSE on Friday, following a briefing on the crisis at Steinhoff. He shared his expectations for the conference, and specifically how the outcomes will be received by the markets.

Different analysts have shared views that a win for Deputy President Cyril Ramaphosa would bode well for the economy. Alternatively, if former African Union Commission chair Nkosazana Dlamini-Zuma were to win, then South Africans can expect policies much like those of President Jacob Zuma.

“Our rand is being influenced by media and investor sentiment. Whatever happens at the end of the conference, whether it goes up or takes a bit of a knock it will eventually self-correct,” he said.

Gigaba added that even if there is volatility, it should not last longer than two days. “It is going to self-correct immediately. The fundamentals of our economy are very strong. The fundamentals of our society, the Constitution, is very strong.”

The growth trajectory the economy is on at the moment provides a “greater impetus” and “positive sentiment” to the foreign exchange and economic performance, than whoever might be elected as the president of the ANC.

“Whoever is elected, there will be slight movements, but the rand will self-correct and stabilise,” said Gigaba.

Investor confidence

He explained that the fact that the ANC is a democratic organisation with elections every five years, should be the first source of certainty for investors.

“Investors must take comfort in the sense that the leadership elected is going to be a blend of continuity and change. The policies adopted will also reflect that dynamic.”

Gigaba explained that economic policies discussed will have consistency and that new items will be introduced that will continue the growth and development agenda.

“Everybody should feel comfortable that once the conference takes place, life goes on, SA remains in business.”

Gigaba also shared views on the candidates, which include Lindiwe Sisulu, Jeff Radebe, Baleka Mbete, Matthews Phosa and Zweli Mkhize, apart from front-runners Dlamini-Zuma and Ramaphosa.

“I am very happy with all the candidates for the presidential job of the ANC. They are all seasoned politicians that have got extensive experience both in the party and government.

“They have played big roles in different areas of assignment in the last 23 years of our democracy.”

Gigaba said that investors should be assured that policies implemented following the conference will be that of the ANC, and not of an individual. “If that was the case, there would be grounds for uncertainty… I would not be uncomfortable with any of them [candidates].”

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