Rand slumped from R3.62 to R19.80 since 1994

Presidents of South Africa

Since the ANC government took office in 1994, the South African rand has declined from R3.62 per US dollar to over R19.80 per US dollar.

Over the last three decades, the rand’s value has declined by 82% relative to the US dollar. It is equivalent to losing an annual compounded 6% in rand value for the 29-year period.

2023 has been a particularly bruising year for the local currency. It weakened from around R17.00/USD in January to over R19.80 this week.

The rand weakness in the first few months of the year was caused by load-shedding, failing SOEs, an underperforming economy, greylisting, and portfolio outflows.

More recently, the diplomatic fallout after the US Ambassador to South Africa’s comments about selling weapons to Russia led to a sharp sell-off in the rand.

It reached its worst-ever level against the US dollar, trading at R19.51/USD on 12 May 2023. It continued to weaken and reached a new low of 19.87/USD on Tuesday.

George Glynos, head of Research at ETM analytics, warned that the rand could weaken to levels much lower than R20 to the US dollar.

The biggest immediate risk is South Africa hosting Russian President Vladimir Putin at the BRICS summit set to be held in Cape Town in August.

George Glynos, head of research at ETM analytics, said it would be incredibly dangerous for South Africa’s economy to host Putin and not arrest him as the law requires.

“South Africa risks becoming a pariah state. It is not what we need right now,” Glynos said.

“The situation is very sensitive, and the further we go down this road, the more dangerous it becomes.”

“Nobody wants to see a rand trading at R21, R22, or even lower against the US dollar.”

The weak rand imposes an enormous cost on the economy and will plunge the country into a deep recession.

Many South African businesses and leaders have highlighted that most of the economic challenges, which resulted in the weak currency, are self-inflicted.

From unfriendly business policies to poor geopolitical decisions, the government has made the country hostile to investors.

This was not always the case. Under former President Thabo Mbeki, South Africa showed strong economic growth and was a popular emerging market destination for foreign investors.

However, under President Jacob Zuma, things changed, and the downward spiral accelerated under President Cyril Ramaphosa.

Daily Investor compared the rand’s performance under each South African President since 1994.

Nelson Mandela

When Nelson Mandela became president in 1994, the US dollar could buy R3.62. After his tenure, one dollar could buy R6.09.

This translates to a 40.56% decline in the rand’s value, converted to an annualised compounded decline of 12.19%.

Thabo Mbeki

During Thabo Mbeki’s tenure, South Africa was prosperous and experiencing strong economic growth. The rand, however, still depreciated and lost 25% during his nine-year term.

This is equivalent to an annualised compounded decline of 3.1% relative to the US dollar for each year of his presidency.

Thabo Mbeki was the best president the ANC had delivered thus far when measured against currency strength.

Jacob Zuma

Jacob Zuma’s presidency is tainted with low economic growth, corruption, and state capture. During his term, the rand depreciated by 30%.

This is converted to an annualised decline of 3.8% relative to the US dollar over his nine years as president.

Cyril Ramphosa

Cyril Ramaphosa has only served five years, and the rand has already lost 40.90% of its value relative to the US dollar. 

This translates to an annualised compounded decline of 9.98%.


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