C&B Notes

South Africa’s Political Challenge

One of the more promising growth stories in the world, and Africa’s biggest economy, may be adversely impacted by political conflicts among its dominant party’s leadership.

 

Leaders of the African National Congress, in an unusually public effort to counter perceptions of disunity, scolded politicians for commenting on power struggles within South Africa’s ruling party.  On Tuesday, party officials lashed out at ANC Youth League leader Julius Malema for comparing President Jacob Zuma’s tenure at the top of the party to a dictatorship.  “It’s a serious insult directed to all of us,” said ANC Secretary-General Gwede Mantashe during a news conference at the party’s headquarters.

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South Africa, the continent’s largest economy, is paying a price for the political discord.  Last week, Standard & Poor’s Ratings Services lowered its outlook for South Africa’s sovereign debt to negative from stable.  The company said conflict around the December conference might foreshadow policies hostile to investment, and that Mr. Zuma’s cabinet is unlikely to make tough political decisions, such as curbing rapidly expanding labor costs, until the leadership struggle is settled.

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