By any measure it has been a bad few months for the South African economy. Confidence has plummeted since the contentious firing of former finance minister Pravin Gordhan in March, followed by sovereign downgrades to ‘junk’ status by S&P and Fitch in April. By early June it had entered recession.
Driving much of this is political instability, embodied by the scandal-ridden presidency of Jacob Zuma. Amid almost daily, high profile reports of infighting South Africa’s politics has become its greatest economic liability.
Yet rather than calming concerns its leaders seem intent on deepening anxiety about the country’s political future. Meddling in the economy, far from receding, is gathering steam.
The latest row is over the independence of the central bank, following reports that the government is seeking changes to its traditional role of focusing on currency stability towards promoting growth. The rumours have already prompted warnings of further downgrades into junk territory by S&P.
The news comes as the country’s Chamber of Mines is threatening to take the government to court over proposed changes in its vast mining sector. Fitch has warned they may deter much-needed investment.