For South Africans, it has been a bruising year, and yet within the helter-skelter it is just possible to discern the seeds of renewal. The year was bracketed by the dismissal of Finance Minister Pravin Gordhan early in the year and the election of Deputy President Cyril Ramaphosa at the very end, symbolising the country’s decline and, hopefully, rebound.
Between those two events, the country was tossed on stormy seas almost without respite. The key events were the continuing crisis at the South African Social Security Agency about the social grants distribution company Net1, quickly followed by the "Guptaleaks" disclosures, a series of crises and scandals at Eskom, two attempts to remove the president through votes of no confidence in Parliament, a string of court cases on various political issues, and finally the collapse of the share price of retailer Steinhoff. In the region, there was also the soft military coup in Zimbabwe and the ousting of Robert Mugabe.
Even for the most cynical, the 'Guptaleaks' e-mails were a revelation
The economic background was dire with SA’s debt sliding, and all major ratings agencies setting their sights lower and consequently interest rates ratcheting higher. So absorbing was the local news flow, it was almost inevitable that a major international event had been missed. That event was the synchronised rebound in global economic prospects.
Economically, SA has so far been only marginally lifted by this international tide. But for almost all of the rest of the world, economic vim is returning. Emerging and developing economies, essentially the global growth, have been steadily declining off a high base, dropping each year from 7.4% aggregate real GDP growth to 4.3% in 2016. That trend was broken in 2017. Developed markets, meanwhile, which are normally much less volatile, also turned up modestly. Africa rebounded strongly, as did South America.
This economic context has helped to take the sting out of the twin calamities of 2016, the unexpected decision by the UK to leave the EU and the equally unexpected election of Donald Trump as US president. Those two events threatened a perilous 2017 because they suggested growth in populism and the rise of mercantilism. But instead, the British decision served to strengthen the EU, symbolised by the victory of upstart centrist candidate Emmanuel Macron as France’s new president, and the re-election of Angela Merkel in Germany as the most popular candidate. There is no doubt that populism remains a global phenomenon, and its rise was evident in both elections. But for now, the major icebergs have been avoided.
Back in SA, however, the major icebergs were being hit squarely head-on. Even for the most cynical, the "Guptaleaks" e-mails were a revelation. For some very renowned institutions in the private sector, they were disastrous: consultancy Bell Pottinger, accounting firm KPMG, software firm SAP, consultancy McKinsey and media and technology company Naspers.
The e-mails laid bare some grotesque double-dealing and fraud that have penetrated some of the most hallowed corners of the private sector, which has long sought to present itself as the antidote to public sector corruption. The e-mails demonstrate the old adage that for every government lackey taking a bribe, there is most often a private sector institution paying it. In some ways, though, there is a false equivalency, since the consequences in the private sector were immediate and dire. Bell Pottinger collapsed entirely and in KPMG, the entire top management was booted — and this strand has yet to play out.
The final major event of the year was the ANC’s long-awaited elective conference, and like so many recent events, it confounded the doomsday previews.
It did not result in a huge split in the ANC. It did not collapse in a festival of court cases. The vote was successfully held, and the outcome was not, as expected, a complete victory of either side. But what has happened is that a major corner has been turned; Cyril Ramaphosa now takes over and next year, all eyes will be on him. Stay tuned.