Back in January 2024, South Africa was in the thick of Stage 6 loadshedding, interest rates were higher and the rand was weak against the dollar. The uncertainty of the upcoming national election added to an already gloomy atmosphere, while the conflicts in Ukraine and Palestine in particular kept global tensions high.
Looking back, it’s clear that some of these challenges have eased while others remain a work in progress. Let’s take a moment to reflect on the key events, both local and global, that defined 2024 and the impact they’ve had along the way.
Q1 2024: A tough start
The year kicked off economically on a depressing note, with the rand trading at R18.82 to the dollar and the local market having delivered a negative return of -2.22% year-to-date. Inflation was 5.2% at this point.
Politically, preparations for the national elections were underway and the newly-formed MK Party (now revealed to be the brainchild of former President Jacob Zuma) was starting to make waves with the electorate.
The controversial National Health Insurance (NHI) Bill was passed, sparking widespread debate and concern.
Markus Jooste, the former Steinhoff CEO died seemingly at his own hand, shortly after receiving a heavy fine by the FSCA for his role in the company’s collapse.
Q2 2024: Political shifts and a brighter outlook
In May, our general election brought a major shake-up as the ANC lost its parliamentary majority for the first time ever, leading to the formation of a coalition government, described as a Government of National Unity (GNU).
Economically, this political change boosted investor confidence, and the rand strengthened significantly to around R18.06 to the US dollar during June 2024. Inflation eased to 5.1%, and the local market climbed to almost 80,000 points.
Loadshedding finally came to an end (at least for the time-being), providing much-needed relief to households and businesses.
Notably, the arrest of former Sports, Arts and Culture minister, Zizi Kodwa, on bribery charges hinted at ongoing or possibly renewed efforts to tackle corruption.
Q3 2024: Recovery and global highlights
On the global front, former US President Donald Trump survived an assassination attempt, and incumbent President Joe Biden announced his withdrawal from the US presidential race, endorsing Kamala Harris.
China announced its largest stimulus package since the pandemic, driving strong rallies in emerging markets, while South Africa took centre stage by hosting the BRICS Summit in Durban.
The third quarter delivered a significant change to the local economic landscape. The SARB cut the repo rate by 25 basis points to 8.0% in September, aligning with a 0.5% rate cut by the U.S. Federal Reserve.
In terms of economic fundamentals, inflation fell to 3.8% by the end of September, and the rand strengthened to R17.26; the local market soared, reflecting a 15.91% YTD return.
Q4 2024: The remainder of the year
The final quarter has brought encouraging developments thus far. On November 15, S&P Global Ratings upgraded South Africa’s outlook from “stable” to “positive,” citing improved reforms and increased private investment.
The fight against corruption continues, with the arrest of SAFA president Danny Jordaan on fraud charges.
Internationally, Donald Trump won the U.S. presidential election, signalling a shift in U.S. policies.
With stabilised energy supply, political reforms, and an improving economic outlook, South Africa seems set to end the year on a hopeful note.
Conclusion
As 2024 draws to a close, it’s clear that it brought its fair share of both challenges and progress.
While we can’t predict what lies ahead, in comparison to where we stood twelve months ago, it’s evident that we are heading into the new year in a stronger position. With resilience and continued effort, South Africa is better prepared to face whatever 2025 may hold.
By Michael Maré, CFP® FPSA®
B.Com