LOWER COUNTRY RISK FOR SOUTH AFRICA

Readers who have had concerns lately about country risk for South Africa will be interested in two pieces of favourable news, regarding the future of the country's politics, and private economy.

 First, the ruling African National Congress (ANC) has affirmed a decision to suspend its polarising youth leader, Julius Malema. Mr. Malema, who enjoys widespread political support in the country, seeks to appropriate white-owned land, and has taken a radical nationalist anti-white position, which has resonated with many unemployed youths. He sang an anti-white song previously banned by the ANC as divisive at a political rally. Malema's suspension is for a period of five years.

Second, the ANC has indicated that it will recommend against nationalisation of the country's mines, and instead will support increased taxes on the mining industry. Investors had worried that state takeover in the mining sector would increase country risk, as there are doubts as to whether the government could effectively operate them.

In my opinion, these two events operate to reduce country risk for South Africa.