South Africa is in a state of slow recovery from a weakened rand, load shedding, and fuel hikes.

Financial analysts are awaiting the outcome of the election in May, which will ultimately determine the rand’s trajectory in the months to come.

BusinessTech spoke to investment specialist Tsitsi Hatendi-Matika, who says that the rand is currently predicted to be on track for the R14 to the dollar mark after the elections.

However, she cautioned that this does not account for this week’s spike in oil prices.

“We know this oscillates between the high-end and the low-end but around these levels, we think it as fair value,” she said.

However, Hatendi-Matika said it was difficult to guess exactly which way the elections will turn out, as polls typically don’t account for the 8 million South Africans who opt not to vote.

History tells us that the ANC will win the election comfortably, as they have since the first democratic election in 1994. However, polls show that something of a coalition government is also possible, as support rises for the EFF and the DA.

In the event that elections provide an unexpected result – such as a president who doesn’t get the majority vote – the rand’s levels could differ dramatically, she said.

“We had a meeting about this last week and it was noted that ‘black swan events’ by their nature cannot be anticipated.

A black swan event is similar to Natalie Portman stabbing herself before dancing act two of Swan Lake – so an unexpected event that’s extremely difficult to predict.

And then there’s America:

Washington announced a new plan on Monday (22 April) to impose sanctions on countries that import Iranian oil by no longer granting exemptions, and effectively withdrawing from a 2015 agreement.

This sent international oil prices to their highest levels in 2019, with the spot price of Brent crude hitting just under $75 a barrel, and WTI at $65.70.

Hatendi-Matika said that in the short-term these high oil prices will feed into fuel price increases which will subsequently feed into food price increases.

This could ultimately impact South African interest rates and lead to potential job losses.

While we wait to find out what the rand will be worth post-elections, we can take a peek at what it will look like.

According to BusinessTech, the South African Mint has unveiled its new circulation coins celebrating 25 years of constitutional democracy.

‘Let us live and strive for freedom’ – R5 coin

Artist: Lady Skollie
Reverse Typographer: Garth Walker

The quote from the national anthem will be useful for folks like Kurt Darren.

Right to Education – R2 coin

Artist: Neo Mahlangu
Reverse Typographer: Garth Walker

This is one of the more ironic coins, considering that education is the most corrupt sector in the country.

Children’s Rights  – R2 coin 

Artist: Neo Mahlangu
Reverse Typographer: Garth Walker

You can find pictures of more new coin faces here.

[source:businesstech&businesstech]