Because President Jacob Zuma is focused on settling political scores and the country’s leaders on who will succeed him.
South Africa’s increased isolationism because of domestic political battles means its abdicating its traditional role as stabiliser on the African subcontinent – this amidst increased instability in a number of Southern African countries.
This is the reason why South Africa is considered to be one of the top 10 global risks for 2017 by the Eurasia Group, an international risk analyst.
“The reason why we consider South Africa a risk has less to do with its internal squabbles than with the instability in other nations where South Africa have traditionally played a constructive and stabilising role,” says analyst Darias Jonker, director for Africa at the Eurasia Group in London. The company provides strategic analysis for a some of the biggest holders of government bonds as well as a number of multinationals and Fortune100 companies.
The reason why we consider South Africa a risk has less to do with its internal squabbles than with the instability in other nations where South Africa have traditionally played a constructive and stabilising role
Darias Jonker, Eurasia Group analyst
President Jacob Zuma’s political street battles, the African National Congress’ (ANC) struggles and the leadership succession battle has meant the country’s foreign involvement, nominally focused on Africa and Southern Africa, has fallen by the wayside, says Jonker, a former South African diplomat.
“South Africa used to be very active and involved in the region, which meant the subcontinent has been largely stable for the last 20 years. The rest of the world therefore didn’t have to invest resources in order to ensure stability (because South Africa was there).
“Now, with increased ructions in Zimbabwe, the Democratic Republic of the Congo (DRC) and Mozambique, South Africa is found wanting. And this is happening with the United States to a large extent withdrawing from the region and Europe finding itself short of resources.”
Now, with increased ructions in Zimbabwe, the Democratic Republic of the Congo (DRC) and Mozambique, South Africa is found wanting. And this is happening with the United States to al arge extent withdrawing and Europe finding itself short of resources. Jonker
Eurasia cites uncertainty going into next year’s general elections in Zimbabwe and questions around who will succeed President Robert Mugabe, the turmoil in the DRC with President Joseph Kabila and increased conflict in Mozambique between Renamo and Frelimo as flashpoints where South Africa should – but won’t – intervene.
These ructions will inevitably put pressure on South Africa’s balance sheet as immigration increases and its regional trading partners struggle – which will have repercussions for its sovereign rating.
“The irony is that Zuma knows Mozambique very well, having lived in there. However, South Africa has steadily withdrawn from Africa and Southern Africa. There isn’t even a senior diplomat involved in the Mozambican process,” says Jonker.
He adds neither Maite Nkoana-Mashabane, minister of international relations and cooperation, or David Mahlobo, minister of state security, is much involved in events outside of the country, and have seemingly involved themselves in local political fights.
Neither Maite Nkoana-Mashabane, minister of international relations and cooperation, or David Mahlobo, minister of state security, is much involved in events outside of the country.
In a broader African context, South Africa’s inaction will open the door for Angola to play a greater regional role. Farther north, Nigeria has its own internal challenges which also makes it prone to more navel gazing than usual.
“Given this, and South Africa’s stabilising role on the continent, investors are concerned about holding the country’s bonds. If internal political squabbles and external instability leads to South Africa struggling to repay debt, it will have consequences for its sovereign rating,” Jonker argues.
The Eurasia Group expects:
- Zuma to remain as president until his term expires in 2019;
- Political actors aligned to Zuma to emerge the stronger faction in the ANC; and
- That Zuma will play a central role in installing Nkosazana Dlamini-Zuma as his successor.
Read Eurasia’s full analysis of global risks here.
Source: The Huffington Post