News / Africa

    Mandela Death Could Roil South African Economy

    A shopper shows off South Africa's new banknotes, which features an image of former president Nelson Mandela on the front, (File photo).
    A shopper shows off South Africa's new banknotes, which features an image of former president Nelson Mandela on the front, (File photo).
    As South Africans focus on the health of former president Nelson Mandela, there is some speculation about what news of the anti-apartheid icon's eventual loss might do to the South African economy.

    Big news can move financial markets.

    When Italian Prime Minister Sergio Berlusconi offered to step down in 2011, Italy's markets responded positively. When U.S. President Barack Obama was re-elected last year, the U.S. dollar fell on the currency market.

    As Nelson Mandela's health deteriorated, South Africans watched closely. There is an emotional connection most South Africans have with the leader whom many call 'Tata,' the Xhosa word for father.

    Some are concerned that the death of Mandela, the man who led a peaceful transition from apartheid to democracy in South Africa, could shake the nation's economy.

    Michael Furter, founder and director of Consequence Private Wealth, in Cape Town, said local markets could reflect such reaction.  "I would say that in any share market, or any tradable environment, big news events of course tend to move the market either up or down. We find that in the media environment in which we're in, markets tend to react quickly, and possibly too quickly, on big news events. There certainly could be in this case a draw down in share prices," Furter said. "I would anticipate that, based kind of on sentiment, based on reaction."
     
    But he doesn't believe it would be long term.
     
    "The short answer actually is no. I think you'll see a pull-back, but short of there being major unrest following the event, which I wouldn't anticipate, I don't think that you would see that result," he explained. " I think the event itself will be a huge event. Nelson Mandela obviously did just the most amazing things for the country. His loss will be felt. "
     
    Adriaan du Toit, a strategist with Citibank in South Africa, said that for the country's currency, the Rand, there has been some volatility in the market since Mandela was hospitalized on June 8.  "I think the bottom line is there might be evidence of this effect filtering into the market, but its very difficult to assign a portion of the move to Mr. Mandela's hospitalization and news around that since that time," he noted.

    Du Toit said that the emotional connection all South Africans have to Mandela could easily be reflected in the economy, given his stature.
     
    "The bottom line is he's been great statesman, and he has kind of liberalized a country. From that angle I would argue, and as I highlighted I can't speak for other countries and other leaders, but I would argue that the emotional kind of effect, even then the emotional effect as reflected in the market, could be substantially more pronounced," said Du Toit. "But it is important to think about the direct policy influence has dwindled. and as a result it's not clear that from a policy perspective, things happening on a ground level, there will be substantial, if any, changes."
     
    From that perspective, it is going to be difficult for all South Africans, Du Toit said.
    "He's almost 95 years old, he is an old person, and we also need to bear in mind. While we all cherish him, it is a fact that he won't be around forever of course. And that makes it difficult and it means we are kind of hitting reality to some extent, and there will be kind of an emotional backlash, absolutely," he said.
     
    On Tuesday, Cape Town Archbishop Thabo Makgoba offered a prayer that Mandela, the nation's first black president, be granted a "peaceful, perfect end."

    You May Like

    Candidates' Comments Fly Like New Hampshire Snowflakes

    Four days ahead of the country's first-in-the-nation Republican and Democratic party primary elections, surveys show the parties' contests tightening

    South Korea Says North Korea Moving Closer to Rocket Launch

    In phone call, US President Barack Obama and Chinese President Xi Jinping agree that Pyongyang's move would be 'provocative'

    Australian Commander: IS Changing Tactics

    Head of Australian forces in Middle East talks with VOA about training Iraqi troops, countering evolving Islamic State efforts and defeating extremism

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    By the Numbers

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    German Artists to Memorialize Refugees With Life Jacket Exhibiti
    X
    Hamada Elsaram
    February 05, 2016 4:30 PM
    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.
    Video

    Video Genius Lets World Share Its Knowledge

    Inspired by crowdsourcing companies like Wikipedia, Genius allows anyone to edit anything on the web, using its web annotation tool
    Video

    Video Former Drug CEO Martin Shkreli Angers US Lawmakers

    A former U.S. pharmaceutical business executive has angered lawmakers by refusing to explain why he raised the price of a life-saving pill by 5,000 percent. Martin Shkreli was removed from a congressional hearing on Thursday after citing his Fifth Amendment right to stay silent. Zlatica Hoke has more.
    Video

    Video Super Bowl TV Commercials are Super Business for Advertisers

    The Super Bowl, the championship clash between the two top teams in American Football, is the most-watched sporting event of the year, and advertisers are lining up and paying big bucks to get their commercials on the air. In fact, the TV commercials during the Super Bowl have become one of the most anticipated and popular features of the event. VOA's Brian Allen has a sneak peek of what you can expect to see when the big game goes to commercial break, and the real entertainment begins.
    Video

    Video In Philippines, Mixed Feelings About Greater US Military Presence

    In the Philippines, some who will be directly affected by a recent Supreme Court decision clearing the way for more United States troop visits are having mixed reactions.  The increased rotations come at a time when the Philippines is trying to build up its military in the face of growing maritime assertiveness from China.  From Bahile, Palawan on the coast of the South China Sea, Simone Orendain has this story.
    Video

    Video Microcephaly's Connection to Zika: Guilty Until Proven Innocent

    The Zika virus rarely causes problems for the people who get it, but it seems to be having a devastating impact on babies whose mothers are infected with Zika. VOA's Carol Pearson has more.
    Video

    Video Solar Innovation Provides Cheap, Clean Energy to Kenya Residents

    In Kenya, a company called M-Kopa Solar is providing clean energy to more than 300,000 homes across East Africa by allowing customers to "pay-as-you-go" via their cell phones. As Lenny Ruvaga reports from Kangemi, customers pay a small deposit for a solar unit and then pay less than a dollar a day to get clean energy to light up their homes or businesses.
    Video

    Video Stunning Artworks Attract Record Crowds, Thanks to Social Media

    A new exhibit at the oldest art museum in America is shattering attendance records. Thousands of visitors are lining up to see nine giant works of art that have gotten a much-deserved shot of viral marketing. The 150-year-old Smithsonian American Art Museum has never had a response quite like this. VOA's Julie Taboh reports.
    Video

    Video Apprenticeships Put Americans on Path Back to Work

    Trying to get more people into the U.S. workforce, the Obama administration last year announced $175 million in grants towards apprenticeship programs. VOA White House correspondent Aru Pande went inside one training center outside of Washington that has gained national recognition for helping put people on the path to employment.
    Video

    Video New Material May Reduce Concussion Effects

    As the 2016 National Football League season reaches its summit at the Super Bowl this coming Sunday (2/7), scientists are trying to learn how to more effectively protect football players from dangerous and damaging concussions. Researchers at Cardiff and Cambridge Universities say their origami-based material may solve the problem. VOA’s George Putic reports.
    Video

    Video Saudi Arabian Women's Sports Chip Away at Stereotypes

    Saudi Arabian female athletes say that sports are on the front line of busting traditions that quash women’s voices, both locally and internationally. In their hometown of Jeddah, a group of basketball players say that by connecting sports to health issues, they are encouraging women and girls to get out of their homes and participate in public life. VOA’s Heather Murdock reports.
    Video

    Video A Year Later, Fortunes Mixed for Syrians Forging New Lives in Berlin

    In April of last year, VOA followed the progress of six young Syrian refugees -- four brothers and their two friends -- as they made their way from Libya to Italy by boat, and eventually to Germany. Reporter Henry Ridgwell caught up with the refugees again in Berlin, as they struggle to forge new lives amid the turmoil of Europe's refugee crisis.
    Video

    Video Zika Virus May be Hard to Stop

    With the Zika virus spreading rapidly, the World Health Organization Monday declared Zika a global health emergency. As Alberto Pimienta reports, for many governments and experts, the worst is yet to come.